I just have a few transactions that I want to make sure I have made the correct journal entries to:

1. Invested $20,000 cash in the business.

2. Purchased used truck for $7,800, paying $3,000 cash and the balance on account.

3. Purchased cleaning supplies for $1,500 on account.

4. Paid $1,800 cash on one-year insurance policy effective March 1.

5. Billed customers $6,900 for cleaning services.

6. Paid $1,600 cash on amount owed on truck and $800 on amount owed on cleaning supplies.

7. Paid $2,800 cash for employee salaries.

8. Collected $1,600 cash from customers billed on March 14.

9. Billed customers $3,500 for cleaning services.

10. Paid gas and oil for month on truck $200.

Can someone let me know if these questions are true/false:

1. The par value of common stock is usually different from the market value of stock.

2. In the event that a coporation was liquidated, preferred stockholders would be paid before common stockholders.

3. Dividends in arrears on cumulative preferred stock are a long-term liability to the company.

Go ahead and do them yourself.
Submit them here and we shall try and correct them for you.

One account to be debited.
One account to be credited.

Do not forget the narration.

1. Dr. Cash 20000
Cr. Capital 20000

2. Dr. Equipment 7800
Cr. Accounts Payable 4800
Cr. Cash 3000

3. Dr. Cleaning Supplies
Cr. Accounts Payable

4. Dr. Cash
Cr. Prepaid insurance

5. Dr. Accounts Receivable
Cr. Service Revenue

6. Dr. Accounts Payable
Cr. Cash

7. Dr. Salaries Expense
Cr. Cash

8. Dr. Cash
Cr. Accounts Receivable

9. Dr. Accounts Receivale
Cr. Service Revenue

10. Dr. Gas and Oil Expense
Cr. Cash

I believe the answers are:

true
true
true

but I'm not sure. Can someone verify for me?

If a company issues 1,000 shares of $2 par value common stock for $8,000, then recording the journal would involve:


A. Paid-In Capital in Excess of Par Value will be credited for $8,000.
B. Common Stock will be credited for $6,000.
C. Paid-In Capital in Excess of Par Value will be credited for $6,000.
D. Cash will be debited for $2,000.

I think it is answer C.

I have to find the number of common shares issued, and the number of common shares outstanding. I think the number of common shares issued is 500,000. I need help calculating the number of shares outstanding. Is there a formula I can use for this?



Corporation's stockholders' equity at December 31 consists of the following:

Preferred stock, 8%, $50 par value, call price $55 per share 100,000 shares authorized, 15,000 shares issued and outstanding ....... $ 750,000

Common stock, $4 par value 600,000 shares authorized _???? shares issued and ____????___outstanding ............................$2,000,000

Additional paid-in-capital in excess of par-Common...................$1,000,000

Retained earnings ................................ $ 500,000

Treasury Stock.(16,000shares)............$.200,000

Compute the number of common shares outstanding:

A. 600,000.
B. 584,000.
C. 484,000.
D. 500,000.

Journal Entries are correct, except #4. Your debit should be PrePaid Insurance for the amount and your Credit should be Cash for the amount.

Your 3 stock questions are correct

Your common stock question #C is correct.

For your number of common shares outstanding:

First take your $2,000,000 / $4 per share then deduct your Treasury Stock shares to get your number of shares outstanding.

For your number of common shares outstanding:

First take your $2,000,000 / $4 per share then deduct your Treasury Stock shares to get your number of shares outstanding.



Thank you so much for your help! It's nice to know that I knew most of the answers!