| Need Help w/Journal Entries! Collette and Cohen incorporate as CC Designs, INC on January 1, Year 1, CC Designs creates custom wall finishes and sells paining materials. The following transactions occur during January.
a. Cohen contributes cash of $75,000 and receives 15,000 shares of $1 par value stock. (Debit Investment in Securities for 15,000 and credit cash for 75000)
b. Collette contributes $35,000 cash, office furniture with a value of $5,000 and computer equipment with a value of $10,000 and receives 15,000 shares of $1 par value stock. The furniture and equipment is expected to last 5 years and has no salvage value. (Debit Investment in Securities 15,000, Credit Cash 35,000, Credit Furniture 5,000 and Credit Computer Equipment 10,000)
c. On January 2, $10,000 of painting materials are purchased. CC paid $8,000 cash with the remaining amount on account. (Debit Materials for 10,000, Credit Cash 8,000 and Credit Accounts Payable for 2,000)
d. During January, painting materials are sold for $8,000 cash. The cost of the materials is $2,000 (Debit Cash 8,000, Debit Cost of Goods Sold 2,000, Credit Accounts Receivable 8,000, Credit Inventory 2,000)
e. Additional materials with value of $5,000 are sold, with a cost of $1,500, but the cash is not collected as of January 31st. It is expected that the $5,000 will be collected in full by February 15th. (Debit Accounts Receivable 5,000, Debit Cost of Goods Sold 1,500, Credit Materials 5,000, Credit Inventory 1,500)
I'm totally LOST...in red is what I instinctively think - but I know it is wrong b/c the Debits don't add up to the Credits. Can someone help me create the proper accrual basis journal entries for a-e or give me some hints? |