Answer:
1. Dr Cash 700,000
Cr Common Stock 700,000
2. Dr Furnitures and fixtures 113,750
Cr Cash 45,500
Notes Payable 68,250
3. Dr Inventory 280,000
Cr Accounts Payable 280,000
4. Dr Accounts Receivable 476,000
Cr Sales Revenue 476,000
Dr Cost Of Goods Sold 238,000
Cr Inventory 238,000
5. Dr Rent Expense 6,500
Cr Cash 6,500
6. Dr Prepaid Insurace 3,360
Cr Cash 3,360
7. Dr Accounts Payable 202,300
Cr Cash 202,300
8. Dr Cash 95,200
Cr Accounts Receivable 95,200
9. Dr Dividends 7,000
Cr Cash 7,000
10. Dr Depreciation Expense 2,275
Cr Accumulated Depreciation 2,275
11. Dr Insurance Expense 280
Cr Prepaid Insurance 280
Step-by-step explanation:
1. Based on the information given we were told that the company Issued 140,000 shares of common stock in exchange for the amount of $700,000 cash which means that the Journal entry will be recorded as:
Dr Cash 700,000
Cr Common Stock 700,000
2. Based on the information given we were told that the company Purchased furniture and fixtures at the amount of $113,750 in which the
amount of $45,500 was paid in cash and a note which means that the Journal entry will be:
Dr Furnitures and fixtures 113,750
Cr Cash 45,500
Notes Payable 68,250
(113,750-45,500)
3. Based on the information given we were told that the company Purchased inventory on account at the amount of $280,000 which means that the Journal entry will be:
Dr Inventory 280,000
Cr Accounts Payable 280,000
4. Based on the information given we were told that the Credit sales for the month was the amount of $476,000 while the cost of the goods sold was the amount of $238,000 which means that the Journal entry will be:
Dr Accounts Receivable 476,000
Cr Sales Revenue 476,000
Dr Cost Of Goods Sold 238,000
Cr Inventory 238,000
5. Based on the information given we were told that they Paid the amount of $6,500 for rent which means that the Journal entry will be:
Dr Rent Expense 6,500
Cr Cash 6,500
6. Based on the information given we were told that they paid the amount of $3,360 to an insurance company for fire and liability insurance which means that the Journal entry will be:
Dr Prepaid Insurace 3,360
Cr Cash 3,360
7. Based on the information given we were told that they paid the amount of $202,300 on account for the merchandise that was purchased in 3 which means that the Journal entry will be:
Dr Accounts Payable 202,300
Cr Cash 202,300
8. Based on the information given we were told that the amount of 95,200 was Collected from customers on account which means that the Journal entry will be:
Dr Cash 95,200
Cr Accounts Receivable 95,200
9. Based on the information given we were told that they paid shareholders a cash dividend of the amount of $7,000 which means that the Journal entry will be:
Dr Dividends 7,000
Cr Cash 7,000
10. Based on the information given we were told that they Recorded depreciation expense of the amount of $2,275 for the month on the furniture and fixtures which means that the Journal entry will be:
Dr Depreciation Expense 2,275
Cr Accumulated Depreciation 2,275
11. Based on the information given we were told that they recorded the amount of prepaid insurance that expired for the month which means that the Journal entry will be:
Dr Insurance Expense 280
(3,360/12)
Cr Prepaid Insurance 280