Question

) Nuru Meda Golf and Driving Range plc was opened on March 1 by Nuru. The following selected events and transactions occurred during March. Mar. 1 Invested Br.120,000 cash in the business in exchange for ordinary shares. 3 Purchased Mechare Meda’s Golf Land for Br. 76,000 cash. The price consists of land Br. 20,000, building Br. 44,000, and equipment Br. 12,000. (Make one compound entry.) 5 Advertised the opening of the driving range and miniature golf course, paying advertising expenses of Br. 3,200. 6 Paid cash Br. 2,480 for a 1-year insurance policy. 10 Purchased golf equipment for Br.5,000 from Young Company, payable in 30 days. 18 Received golf fees of Br.2,400 in cash. 25 Declared and paid a Br.2,000 cash dividend. 30 Paid salaries and wages of Br.1,800. 0 Paid Young Company in full. 31 Received Br. 1,500 of fees in cash. Snyder uses the following accounts: Cash, Prepaid Insurance, Land, Buildings, Equipment, Accounts Payable, Share Capital—Ordinary, Dividends, Service Revenue, Advertising Expense, and

Answer 1

The following compound entry can be made to account for the events and transactions that occurred during March:

Debit Credit Cash 120,000 Land 20,000 Buildings 44,000 Equipment 12,000 Accounts Payable 5,000 Share Capital—Ordinary 120,000 Dividends 2,000 Service Revenue 2,400 Advertising Expense 3,200 Prepaid Insurance 2,480 Salaries and Wages 1,800 Fees 1,500

This compound entry records the initial investment of cash into the business, the purchase of Mechare Meda’s Golf Land, the payment of advertising expenses, the purchase of golf equipment on credit, the receipt of golf fees in cash, the declaration and payment of a cash dividend, the payment of salaries and wages, and the receipt of fees in cash.