Question

I have completed the first 3 questions and I was wondering if my answers I have are correct. I am unsure about the T-account for inventory. Also for question 2 letter f do I need to create a journal entry for this one or not?

HWK #2 Instrirtinns [1] Swrd tn this PC john sullivan File Home Insert Draw Design Layout References Mailings Review View Help Tell me what you want to do Share Comments Sparty Corporation has been operating for two years. The December 31, 2017 account balances are Cash Accounts Receivable Inventory Short-term Investments Fquipment $102,540 46,500 149,600 113,650 113,540 $132,000Accounts Payable Salaries Payable 42,610 23,000Notes Payable - long term 16,420Contributed Capital 142,000 169,800 Retained Farnings an During the year 2018, the company had the below activities. Note that none of these activities should impact the income statement, only the balance sheet; we are assuming for simplicity that the company did not have any revenues or expenses during 2018 a. Purchased additional cquipment costing $19,000; paying S4,500 in cash and signing a promissory note to pay the balance in three ycars. b. Issucd 10,000 shares of stock, receiving $69,000 in cash and land valucd at $7,500 from investors. c. Collected S19,000 cash on open accounts reccivable from customers. d. Paid off S33,000 of salarics owed from the prior year c. Reccived a S50,000 loan from the bank, payable in four ycars. f. Ordered supplies worth S5,300 from Concord Supplies to be delivered next month. g. Bought additional inventory for $7,460 on account. h. Returned some defective inventory to a supplier for a full cash refund of $200 i. Paid off $20,000 of notes payable a year early. Ignore interest. j. Purchased additional short-term investments for $4,800 cash. Page 1 of2 60 words + 130% 畑明e G:01 PM O Type here to search

Answer 1

The journal entries for question 2 are all correct except a minor change in 2d. The account to be debited should be Salaries Payable instead of Salaries, since we are paying the salaries due of last year. As regards 2f, yes there needs to be a journal entry for this transaction as supplies have been purchased on credit, and is correctly recorded.

As regards T-accounts, in the Cash account, you have forgotten to enter point no 2 h. Cash refund of $200. This will be in debit column and will increase the cash closing balance to $207,900

                                                     Inventory account

Opening balance	$23000
Accounts payable	$7460	Cash	$200
		Closing balance	$30,260
Total	$30,460	Total	$30,460

                                                     Supplies account

Opening balance	0
Accounts payable	$5300	Closing balance	$5300
Total	$5300	Total	$5300

                                                          Loan from bank

		Opening balance	0
Closing balance	$50,000	Cash	$50,000
Total	$50,000	Total	$50,000

The rest of the t-accounts are all correct