Question

Exercise 2-4 (Algo) Journal entries [LO2-3] The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company owns and operates a retail shoe store. Issued 90,000 shares of common stock in exchange for $450,000 cash. Purchased office equipment at a cost of $80,000. $32,000 was paid in cash and a note payable was signed for the balance owed. Purchased inventory on account at a cost of $180,000. The company uses the perpetual inventory system. Credit sales for the month totaled $306,000. The cost of the goods sold was $153,000. Paid $4,000 in rent on the store building for the month of June. Paid $2,160 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2021. Paid $130,050 on account for the merchandise purchased in 3. Collected $61,200 from customers on account. Paid shareholders a cash dividend of $4,500. Recorded depreciation expense of $1,600 for the month on the office equipment. Recorded the amount of prepaid insurance that expired for the month.

Answer 1

Answer:

S/n   General Journal         Debit            Credit

1.       Cash                        $450,000  

              Common Stock                       $450,000

         (Issued Common stock $5 par value)

2.     Furniture and Fixture $80,000  

               Cash                                        $32,000

               Note Payable                          $48,000

3.      Inventory                    $180,000  

                Accounts Payable                  $180,000

4.     Accounts receivable   $306,000

                Sales                                       $306,000

       Cost of goods sold      $153,000  

                 Inventory                                $153,000

5.     Rent Expense               $4,000  

                 Cash                                        $4,000

6.    Prepaid Expense           $2,160  

                 Cash                                          $2,160

7.    Accounts payable         $13,050  

                 Cash                                          $13,050

8.    Cash                                $61,200  

                Accounts Receivables              $61,200

9.    Dividend                        $4,500  

                Cash                                            $4,500

10.  Depreciation Expenses $1,600

             Acc. Dep. Furniture & fixtures       $1,600

11.   Insurance Expense         $180 (2,160/12)

            Prepaid Expense                            $180