Question

gg Study Textbook Solutions Expert Q&A Study Pack Practice Sea Chapter 3, Problem 10E Bookmark Show all steps: C Problem Janet Enterprises incorporated on May 3, current year. The company engaged in the following transactions during its first month of operations. May 3 Issued capital stock in exchange for $950,000 cash. May 4 Paid May office rent expense of $1,800. May 5 Purchased office supplies for $600 cash. The supplies will last for several months. May 15 Purchased office equipment for $12,400 on account. The entire amount is due June 15. May 18 Purchased a company car for $45.000. Paid $15,000 cash and issued a note payable for the remaining amount owed. May 20 Billed clients $120,000 on account. May 26 Declared an $8.000 dividend. The entire amount will be distributed to shareholders on June 26. May 29 Paid May utilities of $500. May 30 Received $90,000 from clients billed on May 20. May 31 Recorded and paid salary expense of $32,000. A partial list of the account titles used by the company includes the following. Cash Dividends Payable Accounts Receivable Dividends Office Supplies Capital Stock Office Equipment Client Revenue Vehicles Office Rent Expense Notes Payable Salary Expense Accounts Payable Utilities Expense a. Prepare journal entries, including explanations, for these transactions b. Post each entry to the appropriate ledger accounts (use the T account format illustrated in Exhibit 3–8).
part A only

Answer 1

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. May.3 $ 950,000.00 Cash Capital Stock |(To record Capital Stock issued for Cash) 950,000.00 May.4 1,800.00 Office Rent Expense Cash (To record Office Rent Expense paid) 1,800.00 May.5 600.00 Office Supplies Cash (To record Office Supplies purchased) 600.00 12,400.00 May.15 Office Equipment Accounts Payable (To record office Equipment purchased on account) 12,400.00 May.18 45,000.00 Vehicles Cash Note Payable (To record purchase of Car and paid cash partly remaining through Note Payable) 15,000.00 30,000.00

$ 120,000.00 May.20 Accounts Receivable Client Revenue (To record revenue on account) 120,000.00 May.26 8,000.00 Dividends Dividends Payable (To record declaration of dividends) 8,000.00 500.00 May.29 Utilities Expense Cash (To record Utilities expense paid) 500.00 May.30 $ 90,000.00 Cash Accounts Receivable (To record collection of receivables) 90,000.00 $ 32,000.00 May.31 Salary Expense Cash (To record Salary Expense paid) 32,000.00