The following transactions occurred during March 2013 for the Wainwright Corpora
ID: 2377364 • Letter: T
Question
The following transactions occurred during March 2013 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.
Purchased equipment at a cost of $44,000. $12,000 cash was paid and a note payable was signed for the balance owed.
Purchased inventory on account at a cost of $86,000. The company uses the perpetual inventory system.
Paid $6,400 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2013.
Post the above transactions to below T-accounts. Assume that the opening balances in each of the accounts is zero.
The following transactions occurred during March 2013 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.
Explanation / Answer
1. Issued 34,000 shares of common stock in exchange for $340,000 in cash.
MMDDYY Cash Dr 340,000
COmmon Stock Cr 340,000
2.Purchased equipment at a cost of $44,000. $12,000 cash was paid and a note payable was signed for the balance owed.
mmddyy Eqpt Acct Dr 44000
Cash Cr 12000
Note payable Cr 32000
3. Purchased inventory on account at a cost of $86,000. The company uses the perpetual inventory system.
mmddyy Inventory Dr 86000
Acct Paybale Cr 86000
4. Credit sales for the month totaled $140,000. The cost of the goods sold was $74,000.
mmddyy Acct Rxable Dr 140,000
Sales Revenue Cr 140,000
mmddyy COGS Dr 74000
Inventory Cr 74000
5. Paid $5,400 in rent on the warehouse building for the month of March.
mmddyy Rent exp Dr 5400
Cash Cr 5400
6.Paid $6,400 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2013.
mmddyy Insurance Exp Dr 6400
Cash Cr 6400
7. Paid $74,000 on account for the merchandise purchased in 3.
mmddyy Acct Payable Dr 74000
Cash Cr 74000
8. Collected $59,000 from customers on account.
mmddyy Cash Dr 59000
Acct Raxble Cr 59000
9. Recorded depreciation expense of $1,400 for the month on the equipment.
mmddyy Dep Exp Dr 1400
Accum Dep Cr 1400
Post the above transactions to below T-accounts. Assume that the opening balances in each of the accounts is zero.
Cash
------------------------
340,000 12000
59000 5400
6400
74000
--------------------------
301200
Acct Payable
------------------------
74000 86000
----------------------
12000
Acct Rxable
-------------------------
140,000 59,000
------------------
81,000
Income-Expense Acct
----------------------
74000 140,000
5400
6400
1400
------------------------
52,800
Eqpt Acct
----------------------
44000 1400
--------------------
42600
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.