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IRINA_888 [86]
3 years ago
10

Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes t

o record the following transactions.
External Transaction Accounts Debit Credit
1. Owners invest $12,500 in the company and receive common stock. Common Stock 12,500
Cash 12,500
2. Receive cash of $3,500 for services provided in the current period. Cash Service Revenue 3,500
3,000
3. Purchase office supplies on account, $250. Supplies 250
Cash 250

4. Pay $550 for next month's rent. Rent Expense 550
Cash 550

5. Purchase office equipment with cash of $1,950. Cash 1,950
Equipment 1,950

Required:
Assess whether the junior accountant correctly proposes how to record each transaction. If incorrect, provide the correction.
Business
1 answer:
azamat3 years ago
4 0

Answer:

Scarlet Knight Corporation

Correct postings:

Accounts                 Debit    Credit

1. Cash                    12,500

  Common Stock                 12,500

2. Cash                     3,500

   Service Revenue               3,500

3. Supplies                 250

  Cash                                      250

4. Rent Expense       550

   Cash                                    550

5. Equipment         1,950

   Cash                                 1,950

Explanation:

a) Data and Calculations:

Accounts                 Debit    Credit

1. Common Stock    12,500

  Cash                                   12,500

2. Cash                     3,500

   Service Revenue               3,000

3. Supplies                 250

  Cash                                      250

4. Rent Expense       550

   Cash                                    550

5. Cash                   1,950

   Equipment                        1,950

b) The accounting rule is to debit the value receiver and to credit the value giver.  Generally, assets, expenses, and losses normally have debit balances while liabilities, equities, incomes, and gains have credit balances.

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Jasper makes a $44,000, 90-day, 9% cash loan to Clayborn Company. Jasper's entry to record the collection of the note and intere
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Jasper's entry to record the collection of the note and interest at maturity should be:

Debit     Cash Account 44,990

Credit    Interest Income $990

Credit    Notes Receivable $43,000

The amount collected is:

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Interest Income

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Now putting the interest income value in the above equation, we have:

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3 0
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In the current year, Oriole Corporation donated a painting worth $30,000 to the Texas Art Museum, a qualified charity. The museu
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Answer:

$30,000

Explanation:

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Answer:

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Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would le
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Answer:

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