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. If 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.

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.

Quote:

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Originally Posted by pready

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.

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

Cash (D) 20000
Capital/Equity (c) 20000

Truck (D) 7800
Cash (C) 3000
Account Payable 4800

Supplies (D) 1500
Account Payable (C) 1500

Insurance Prepaid (D) 1800
Cash (C) 1800
(you haven't told the opening period and ending financal year period,so this is the more considerable answer according to me,and I do think that most of the Accountants agree with me)

Account Receivable/Bank (D) 6900
Service income (C) 6900

Account Payable(Truck) (D) 1600
Account payable(Supplies)(D) 800
Cash (C) 2400

Salary Expense (D) 2800
Cash (C) 2800

Cash/Bank (D) 1600
Account Receivabale (C) 1600

Accounts receivable(Services) (D) 3500
Service income (C) 3500

Oil And Gas Exp (D) 200
CASH/BANK (C) 200

So what is your question? You just have journal entries listed.

My Question is that what is the beginning & ending of the business period and on what basis insurance is to be calculated?

Is insurance traeted as prepaid OR as an expense from march to dec?

This is what I am confused in to answer dear

When you purchased the insurance you treat it as a prepaid insurance because you have not used the insurance yet, you only bought insurance, which will be used. When you have used the insurance, you have to move the portion of insurance used during the accounting period from prepaid insurance to insurance expense.

In your homework assignment the problem should give you the information you need for the dates like 1 Jan, 1 Mar, during a month, or at a Dec month end. You will have to read the problem to figure out what the dates are.

In this problem I suspect that the beginning of the period is 1 March. Also you just have to determine what the journal entry is for each situation, which includes what accounts to debit and credit, then you will record the journal entry. I have josted what the correct journal entries are in a previous post.

I think you are trying to read more into your problem than what the problem calls for.

You will have problems where you have to calculate the amount of insurance used.

Using your information about insurance you purchase Insurance at Mar 1 for one year at a cost of $1,800. At Dec 31 you have to calculate the amount of insurance during the year. 1 Mar to 31 Dec is 10 months so you will have to calculate for 10 months of insurance used in the year. Take $1,800 (cost) / 12 (months in a year) * 10 (months used) = $,1500 or you can take $1,800 * 10/12 = $1,500. Next you will have to transfer $1,500 of insurance used from preapid insurance to insurance expense. The journal entry or adjusting entry to record this is: Debit Insurance Expense for $1,500 and Credit Prepaid Insurance for $1,500 which leaves your prepaid insurance account with 2 months of insurance to be used (Jan and Feb) or $300 of prepaid insurance.

If your problem wants you do do an adjusting entry for one month of insurance then you will take your cost of insurance of $1,800 * 1/12 or $150. The journal entry to record one month of insurance used is: Debit Insurance Expense for $150 and Credit Prepaid Insurance for $150. Now you have 11 months of Prepaid insurance left or $1,650

You just need to read the problem, then figure out what information the problem is giving you, what information you need to get, and how to get the information needed to solve the problem.

How would you post these transactions into t-accounts, I'm having major trouble in a similar question in my workbook.. Would appreciate the help!

T accounts are pretty simple to set-up. You make a big T for every account. On top of your horizontal line is your account name, on the left side of your vertical line is your credit entries, and on the right side of the vertical line is your debit entries.

After you post your beginning account balance and your posting of entries you need to calculate your ending account balance.

I have attached a sample T-account on Excel in 97-2003 format to show you what a T-account looks like.

I've already worked it out :D it was quite simple! Thanks anyway