yDCh2-Homework US 200-Interm × McGraw-Hill Education C X X 0 Not secure | ezto.m

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yDCh2-Homework US 200-Interm × McGraw-Hill Education C X X 0 Not secure | ezto.mheducation.com/hm.tpx?-0.01604060368589344 1535844290375 The following transactions occurred during January 2016 Jan. 1 Sold merchandise for cash. $3,700. The cost of the merchandise was $2.200. The company uses the perpetual Inventory system. 2 Purchased equipment on account for $5,700 from the Strong Company 4 Received a $100 bill from the local newspaper for an advertisement that appeared in the paper on January 2 8 Sold merchandise on account for $5.200. The cost of the merchandise was $3.000 10 Purchased merchandise on account for $9,600 13 Purchosed equipment for cash, $700 16 Pald the entire amount due to the Strong Company 18 Recelved $4,400 from customers on account 20 Pald $700 to the owner of the building for January's rent 30 Paid employees $3.200 for salanes and wages for the month of Januery 31 Pald a cash dividend of $800 to shareholders References Section Break 1000 points Problem 2-2 Part 3 3. Fost the transactions into the appropriate ounts. (Be

Explanation / Answer

This is a simple approach to solve T account

1)

As asset increases Debit "Cash"

2)

Debit

Credit

2200

By selling inventory(asset) decreases so "Credit"

3)

Debit

Credit

5700

Purchased "On Account" meaning is Payable so credit liability increase

4)

Debit

Credit

100

Expense increses "Debit" advertisment expense(I/S)

5)

Debit

Credit

5200

6)

Debit

Credit

700

Asset increses "Debit" Equipment increases so Debit Equipment

Asset deacreses "Credit" Cash decresing so credit cash and

7)

Debit

Credit

5700

To increse payable we Credited so to decrease just "Debit"

8)

Debit

Credit

4400

Receied cash from credit customer: So we must have receivabke balance recorded, we have to cancel it by "Crediting" Accounts receivable(asset account)

9)

Debit

Credit

700

RENT an EXPENSE increase so "Debit"

10)

Debit

Credit

3200

11)

Debit

Credit

800

Dividend are paid out from reserves to increse RE Credit so to deduct from RE "Debit"

or(if declared earlier and paid now)

Debit

Credit

800

DEAD CLIC Debit (For increase in below) Credit (for increase in below) Expense Liability Asset Income Drawings Capital for decrease do credit for decrease do debit

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