Question

Pizza Express Inc. began the Year 2 accounting period with $9,000 cash, $6,000 of common stock, and $3,000 of retained earnings. Pizza Express was affected by the following accounting events during Year 2:______.

1. Purchased $11,000 of supplies on account.
2. Earned and collected $28,000 of cash revenue.
3. Paid $9,500 cash on accounts payable.
4. Adjusted the records to reflect the use of supplies. A physical count indicated that $2,600 of supplies was still on hand on December 31, Year 2.

Answer 1

1. Purchased $11,000 of supplies on account.

Dr Supplies 11,000

Cr Accounts payable 11,000

2. Earned and collected $28,000 of cash revenue.

Dr Cash 28,000

Cr Sales revenue 28,000

3. Paid $9,500 cash on accounts payable.

Dr Accounts payable 9,500

Cr Cash 9,500

4. Adjusted the records to reflect the use of supplies. A physical count indicated that $2,600 of supplies was still on hand on December 31, Year 2.

Dr Supplies expense 8,400

Cr Supplies 8,400