Question

Stockholders invested $10,000 cash in the business in exchange for common stock. 5 Purchased equipment for $12,000 paying $4,000 in cash and the balance on account. 25 Paid $2,400 cash on balance owed for equipment. 30 Declared and paid a $500 cash dividend. Alvarado’s chart of accounts shows No. 101 Cash, No. 157 Equipment, No. 201 Accounts Payable, No. 311 Common Stock, and No. 332 Dividends

a. Journalize the transactions. (Omit explanations.)

b. Post the transactions using the standard account form.

Answer 1

1. Dr Cash 10000

Cr Common stock 10000

2. Dr equipment 12000

Cr Cash 4000

Cr Accounts payable 8000

3. Dr Accounts payable 2400

Cr Cash 2400

4.a) Dr Retained Earning 500

Cr Dividend payable 500

b) Dividend payable 500

Cash 500

Step-by-step explanation:

b.

Cash Common Stock

_Dr_______ Cr_____ Dr______________Cr_____

10000 --- 4000 --- 10000

--- 2400

--- 500

Equipment Accounts payable

Dr____________Cr____ _Dr_______________Cr______

12000 --- 2400 ---- 8000

Retained Earning Dividend Payable

Dr______________Cr_______ Dr__________________Cr___

500 ---- 500 -- 500

Trial Balance

Cash 3100 - 10000 Common Stock

Equipment 12000 - Dividend payable

- 5600 Account payable

Retained earning 500 -

Total 15600 = 15600 Total