Slide 1

Journal Entry PracticeE3-3Recording the TransactionsA customer orders and receives 10 personal computers from Dell; the customer promises to pay $18,400 within three months. Answer from Dells standpoint. What about cost info?

Account NameDebitCreditAccounts Receivable$18,400 Sales Revenue$18,400Fucillo Hyundai, Inc, sells a truck with a list, or sticker, price of $20,050 for $18,050 cash.

Account NameDebitCreditCash$18,050 Sales Revenue$18,050Bon-Ton Department Store orders 1,000 mens shirts from Arrow Shirt Company for $15 each for future delivery. The terms require full payment within 30 days of delivery. Answer from Arrows standpoint.

Account NameDebitCreditNo EntryArrow Shirt Company completes production of the shirts described in part c and delivers the order (answer from Arrow Shirt Company perspective)

Account NameDebitCreditAccounts Receivable$15,000 Sales Revenue$15,000Arrow receives payment from Bon-Ton for the order described in part c. Answer from the perspective of Arrow Shirt Company.

Account NameDebitCreditCash$15,000 Accounts Receivable$15,000A customer purchases a ticket from American Airlines for $410 cash to travel the following January. Answer from American Airlines perspective.

Account NameDebitCreditCash$410 Unearned Airfare Revenue$410General Motors issues $20 million in new common stock

Account NameDebitCreditCash$20,000,000 Contributed Capital$20,000,000Pen State University receives $18,300,000 cash for 80,000 five-game season football tickets.

Account NameDebitCreditCash$18,300,000 Unearned Football Ticket Revenue$18,300,000Penn State plays the first football game described in part h.

Account NameDebitCreditUnearned Football Ticket Revenue$3,660,000 Football Ticket Revenue$3.660,000Precision Construction Company signs a contract with a customer for the construction of a new $500,000 warehouse. At the signing, Precision receives a $50,000 deposit as a deposit on the future construction project. Answer from the perspective of Precision.

Account NameDebitCreditCash$50,000 Unearned Construction Revenue$50,000On September 1, 2012, a bank lends $1,200 to a company; the note principal and $144 annual interest are due in one year (1,200 X 12%). Answer from the Banks perspective.NOW:

In 1 year (assuming no other transactions are recorded?

Account NameDebitCreditNote Receivable$1,200 Cash$1,200Account NameDebitCreditCash$1,344 Notes Receivable$1,200 Interest Revenue$144A popular ski magazine company receives a total of $1,980 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the perspective of the magazine company:

What do you do with each edition of the magazine that is sent out (assume 12 issues)?

Account NameDebitCreditCash$1,980 Unearned Subscription Revenue$1,980Account NameDebitCreditUnearned Subscription Revenue$165 Subscription Revenue$165Sears, a retail store, sells a $100 lamp to a customer who charges the sale on his store credit card. Answer from Sears perspective.

Account NameDebitCreditAccounts Receivable$100 Sales Revenue$100E 3-4Recording the transactionsDell pays its computer service technicians $79,500 in salaries for two weeks ended January 7.

ASSUME: No Salaries Payable has been previously recorded.Account NameDebitCreditSalaries Expense$79,500 Cash$79,500At the beginning of January, Turner Construction Company pays $4,410 in workers compensation insurance for the first three months of the year.

Account NameDebitCreditPrepaid Insurance$4,410 Cash$4,410McGraw-Hill Publishing Company uses $754 worth of electricity and natural gas in its headquarters building for which it has not yet been billed.

Note: Expense is incurred when utilities are used and can be recorded when amount is known.

Account NameDebitCreditUtilities Expense$754 Utilities Payable$754Arrow Shirt Company completes production of 500 mens shirts ordered by Bon-Tons Department Store at a cost of $10 each and delivers the order.

Note: No information was provided about sales information. Would have been Accounts Receivable and Sales Revenue.

Account NameDebitCreditCost of Goods Sold$5,000 Inventory$5,000The campus bookstore receives 500 accounting texts at a cost of $43 each. The terms indicate that payment is due within 30 days of delivery.

Account NameDebitCreditInventory$21,500 Accounts payable$21,500During the last week of January, the campus bookstore sold 450 accounting texts received in part e at a sales price of $92 each.

Assume cost data from part e (cost of $43 per book)

Account NameDebitCreditCash$41,400 Sales Revenue$41,400Account NameDebitCreditCost of Goods Sold$19,350 Inventory$19,350Fucillo Hyundai, Inc. pays its salespersons $3,200 in commissions related to December automobile sales.

Assume: Company had previously recorded commissions payable.

Account NameDebitCreditCommissions Payable$3,200 Cash$3,200Fucillo Hyundai, Inc. determines that it will pay its salespersons $4,470 in commissions related to January sales. The payment will be made in early February.

Account NameDebitCreditCommissions Expense$4,470 Commissions Payable$4,470A new grill is purchased and installed at a Wendys restaurant at the end of the day on January 31; $8,750 cash payment was made on that day.

Account NameDebitCreditEquipment$8,750 Cash$8,750The University of Florida orders 60,000 season football tickets from its printer and pays $5,410 in advance for the custom printing. The first game will be paid in September.

Account NameDebitCreditTickets Receivable$5,410 Cash$5,410Carousel Mall had janitorial supplies costing $4,000 in storage. An additional $2,600 worth of supplies was purchased during January. At the end of January, $410 worth of janitorial supplies remained in storage.

Assume: Purchase of supplies was properly recorded, just recording the supplies used.

Account NameDebitCreditSupplies Expense$6,190 Supplies$6,190An Iowa State University employee works eight hours, at $13 per hour, on January 31; however, payday is not until February 3.

Account NameDebitCreditWages Expense$104 Wages Payable$104Wang Company paid $3,600 for a fire insurance policy on January 1. The policy covers 12 months beginning January 1.

Account NameDebitCreditPrepaid Insurance$3,600 Cash$3,600Darrius Incorporated has its delivery van repaired for $300 and charges the amount on account.

Account NameDebitCreditRepairs & Maintenance Expense$300 Accounts Payable (Maint. Payable)$300Hass Company, a farm equipment company, receives its phone bill at the end of January for $202 for January calls. The bill has not been paid to date.

Account NameDebitCreditPhone Expense$202 Accounts Payable$202Martin Company receives and pays in January a $1,285 invoice (bill) from a consulting firm for services received in January.

Account NameDebitCreditConsulting Expense$1,285 Cash$1,285Parillos Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December.

Account NameDebitCreditAccounts payable$595 Cash$595