ACCT 20100 Review Problem

ACCT 20100 Review Problem

Journal Entries

Transaction 1

Account Debit Credit

Mike Company had sales of goods totaling $15,000, receiving $10,000 in cash and $5,000 on account. The cost of goods sole was $5,000.

Transaction 1

Account Debit Credit

Cash $10,000

Accounts Receivable $ 5,000

Sales $15,000

Cost of Goods Sold $5,000

Inventory $5,000

Mike Company had sales of goods totaling $15,000, receiving $10,000 in cash and $5,000 on account. The cost of goods sole was $5,000.

Transaction 2

Account Debit Credit

Mike Company purchased $15,000 of inventory. All purchases were on account.

Transaction 2

Account Debit Credit

Inventory $15,000

Accounts Payable $15,000

Mike Company purchased $15,000 of inventory. All purchases were on account.

Transaction 3

Account Debit Credit

Mike Company paid salaries, including $1,000 for this month and $1,500 that was payable from last month.

Transaction 3

Account Debit Credit

Salary Expense $1,000

Salaries Payable $1,500

Cash $2,500

Mike Company paid salaries, including $1,000 for this month and $1,500 that was payable from last month.

Transaction 4

Account Debit Credit

Mike Company purchased $500 of supplies. All of these purchases were on account.

Transaction 4

Account Debit Credit

Supplies $500

Accounts Payable $500

Mike Company purchased $500 of supplies. All of these purchases were on account.

Transaction 5

Account Debit Credit

Mike Company collected $2,500 cash from customers who had been granted credit. The entire amount collected relates to sales from last month.

Transaction 5

Account Debit Credit

Cash $2,500

Accounts Receivable $2,500

Mike Company collected $2,500 cash from customers who had been granted credit. The entire amount collected relates to sales from last month.

Transaction 6

Account Debit Credit

Mike Company paid utilities of $500.

Transaction 6

Account Debit Credit

Utilities Expense $500

Cash $500

Mike Company paid utilities of $500.

Transaction 7

Account Debit Credit

Mike Company paid $3,000 to its suppliers related to previous purchases on account.

Transaction 7

Account Debit Credit

Accounts Payable $3,000

Cash $3,000

Mike Company paid $3,000 to its suppliers related to previous purchases on account.

Transaction 8

Account Debit Credit

Mike Company paid $1,500 for this month’s rent.

Transaction 8

Account Debit Credit

Rent Expense $1,500

Cash $1,500

Mike Company paid $1,500 for this month’s rent.

Transaction 9

Account Debit Credit

Mike Company incurred depreciation expense for the month of $2,000.

Transaction 9

Account Debit Credit

Depreciation Expense $2,000

Accumulated Depreciation $2,000

Mike Company incurred depreciation expense for the month of $2,000.

Transaction 10

Account Debit Credit

After counting its supplies on hand, Mike Company determined that they had $1,000 in supplies on-hand as of the end of the month.

Transaction 10

Account Debit Credit

Supplies Expense $1,500

Supplies $1,500

After counting its supplies on hand, Mike Company determined that they had $1,000 in supplies on-hand as of the end of the month.

Transaction 11

Account Debit Credit

$1,000 of prepaid insurance expired.

Transaction 11

Account Debit Credit

Insurance Expense $1,000

Prepaid Insurance $1,000

$1,000 of prepaid insurance expired.

Transaction 12

Account Debit Credit

Mike Company paid $300 of interest on its long-term debt.

Transaction 12

Account Debit Credit

Interest Expense $300

Cash $300

Mike Company paid $300 of interest on its long-term debt.

Transaction 13

Account Debit Credit

Mike Company incurred $1,000 of salaries expense, but will pay this amount next month.

Transaction 13

Account Debit Credit

Salaries Expense $1,000

Salaries Payable $1,000

Mike Company incurred $1,000 of salaries expense, but will pay this amount next month.

Transaction 14

Account Debit Credit

Mike Company declared and paid $500 in dividends.

Transaction 14

Account Debit Credit

Retained Earnings $500

Cash $500

Mike Company declared and paid $500 in dividends.