Question

Exercise 3-14A Recording events in the general journal and identifying their effect on financial statements LO 3-2 a. Performed $8,200 of services on account. b. Collected $5,600 cash on accounts receivable. c. Paid $1,450 cash in advance for an insurance policy. d. Paid $400 on accounts payable. e. Recorded the adjusting entry to recognize $300 of insurance expense. f. Received $1,600 cash for services to be performed at a later date. g. Purchased land for $9,000 cash. h. Purchased supplies for $350 cash. Required Record each of the above transactions in general journal form and then show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. Credit Transaction a Account Titles Accounts receivable Service revenue Debit 8,200 8,200 Complete this question by entering your answers in the tabs below.

Answer 1

Journal Entries:

		Account title and explanation	Debit	Credit
	a	Accounts receivable	$8,200
		Service revenue		$8,200
		[To record credit sales]
1	b	Cash	$5,600
		Accounts receivable		$5,600
		[To record collections from customers]
2	c	Prepaid insurance	$1,450
		Cash		$1,450
		[To record payment of insurance]
3	d	Accounts payable	$400
		Cash		$400
		[To record cash paid for accounts payable]
4	e	Insurance expense	$300
		Prepaid insurance		$300
		[To record insurance expense]
5	f	Cash	$1,600
		Unearned service revenue		$1,600
		[To record cash received in advance]
6	g	Land	$9,000
		Cash		$9,000
		[To record purchase of land for cash]
7	h	Supplies	$350
		Cash		$350
		[To record purchase of supplies for cash]

Horizontal Analysis:

Transaction	Assets	=	Liabilities	+	Equity	Revenue	-	Expenses	=	Net income	Statement of Cash flow
a	8,200	=		+	8,200	8,200	-		=	8,200
b	5,600	=		+			-		=		5,600	OA
	-5,600	=		+			-		=
c	-1,450	=		+			-		=		-1,450	OA
	1,450	=		+			-		=
d	-400	=	-400	+			-		=		-400	OA
e	-300	=		+	-300		-	300	=	-300
f	1,600	=	1,600	+			-		=		1,600	OA
g	9,000	=		+			-		=
	-9,000	=		+			-		=		-9,000	IA
h	350	=		+			-		=
	-350	=		+			-		=		-350	OA
Total	9,100	=	1,200	+	7,900	8,200	-	300	=	7,900	-4,000