HH #2: DECEMBER ORIGINAL JES IMPORTANT REMINDERS FOR DECEMBER ORIGINAL JEs A) DO
ID: 2564628 • Letter: H
Question
HH #2: DECEMBER ORIGINAL JES IMPORTANT REMINDERS FOR DECEMBER ORIGINAL JEs A) DON'T FORGET TO CONSULT THE HH CHART OF ACCOUNTS FOR ALL THE ACCOUNT TITLES YOU WILL NEED TO USE AND DON'T FORGET TO USE EXAMPLES IN YOUR CHAPTER 3 NOTES TO ASSIST YOU. B) USE AN ASSET (PREPAID) ACCOUNT FOR ALL PREPAYMENTS HOMER'S MAKES or INSURANCE, ADVERTISING, SUPPLIES, etc.), AND A LIABILITY (UNEARNED) ACCOUNT FOR ALL PAYMENTS RECEIVED in ADVANCE BY HOMER'S C) DON'T INCORPORATE ANY ADJUSTMENT DATA INTO THE ORIGINAL DECEMBER JOURNAL ENTRIES. YOU WILL RECEIVE A SEPARATE DOCUMENT WITH INSTRUCTIONS/INFORMATION ABOUT RECORDING THE AJEs D) SKIP A LINE BETWEEN JE'S. YOU WILL NOT NEED TO USE THE "REF" COLUMN IN JOURNALIZING THE ORIGINAL DECEMBER TRANSACTIONS. WE WON'T USE THAT COLUMN UNTIL WE GET TO THE POSTING PROCESS IN HH #3, YOU WILL ONLY NEED TO USE THE FIRST FEW LINES ON GJ PAGE J3, SO DON'T WORRY IF YOU HAVE A LOT OF LINES LEFT OVER ON THAT PAGE. DECEMBER TRANSACTION DATA Homer's prepays $1,200 (cash) for a general insurance policy. The term of the policy is one year, running from 12/1/16 through 11/30/17. Dec 1 Homer's purchases a forklift (Equipment) for $10,000, paying $5,000 in cash and signing a 5 year, $5,000, Note Payable for the remaining amount. Dec 1 Dec 1 Homer's purchases additional Equipment for $2,000, paying cash. Homer's purchases lumber (inventory) for $27,000 from MMLC. Homer's had previously established a $10,000 credit limit with MMLC. After using up that limit (as an Accounts Payable to MMLC), HH pays cash for the remaining amount. Dec 4Explanation / Answer
Journal Entry Date Particulars Dr. Amt. Cr. Amt 1-Dec Prepaid Insurance Dr. 1,200 To Cash 1,200 (Record the insurance paid) 1-Dec Equipment Dr. 10,000 To Cash 5,000 To Long Term Notes Payable 5,000 (Record the equipment purchase) 1-Dec Equipment Dr. 2,000 To Cash 2,000 (Record the equipment purchase) 4-Dec Inventory Dr. 27,000 To Cash 17,000 To Accounts Payable 10,000 (Record the inventory purchased) 5-Dec Rent Expenses Dr. 200 To Cash 200 (Record the Rent paid) 15-Dec Prepaid Advertising Dr. 300 To Cash 300 (Record the advertisment for 3 months paid) 15-Dec Cash Dr. 600 To Unearned Rent Revenue 600 (record the rent received) 16-Dec Cash Dr. 5,000 Notes Receivable Dr. 10,000 To Land 10,500 To Gain on Sale of Land 4,500 (record the sale of land) Cost of land per acre = $70,000 / 20 acre = $3,500 Cost of Land - 3 Acre = $3500 X = $10,500 17-Dec Office Supplies Dr. 250 To Cash 250 (Record the supplies purchsed) 18-Dec Losses Dr. 1,800 To Income Summary 1,800 (Record the loss of inventory due to fire) 28-Dec Salary & Wages Expense Dr. 5,248 To Cash 5,248 (record the salary paid) 31-Dec Retained Earnings Dr. 2,000 To Dividend Payable 2,000 (record the dividend declared) Diivdend Payable = $0.05 X 40,000 shares = $2,000 31-Dec Cash Dr. 36,700 To Accounts Receivable 36,700 (record the cash collected from customers)
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