Example One: The following transactions apply to ABC, Inc. for May 2018, its fir
ID: 2529586 • Letter: E
Question
Example One:
The following transactions apply to ABC, Inc. for May 2018, its first month of operations.
Record each of the following transactions in general journal form. ABC Inc. uses the perpetual inventory method.
May 1, issued 65,000 shares of $2 par common stock for $10 per share.
May 1, paid $3,200 for January’s utilities.
May 2, purchased $12,000 of supplies on account.
May 8, purchased $13,000 of merchandise, on account.
May 15, borrowed $20,000 by signing a 5%, 5-year note.
May 12, sold inventory for $16,000, on account. Cost of the merchandise was $9,000.
May 20, paid $8,000 on accounts payable.
May 21, received $11,000 on accounts receivable.
May 22, declared a $4,500 dividend with a date of record January 25.
May 30, paid the $4,500 dividend.
Date
Account Name
Debit
Credit
Date
Account Name
Debit
Credit
Date
Account Name
Debit
Credit
Date
Account Name
Debit
Credit
Explanation / Answer
Date Account Debit credit may 1 cash [65000*10] 650000 common stock [65000*2] 130000 paid in capital in excess of par -common stock 520000 may 1 utilities payable 3200 cash 3200 may 2 supplies 12000 Accounts payable 12000 may8 merchandise inventory 8000 accounts payable 8000 may 15 cash 20000 note payable 20000 may 12 Accounts receivable 16000 sales revenue 16000 cost of goods sold 9000 merchandise inventory 9000 may 20 accounts payable 8000 cash 8000 may 21 cash 11000 Accounts receivable 11000 may 22 cash dividend /Retained earning 4500 dividend payable 4500 may 30 dividend payable 4500 cash 4500
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.