Page 104 - Accounting Principles (A Business Perspective)

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Exercise C Prepare the journal entry required for each of the following transactions:
a. Capital stock was issued for USD 100,000.
b. Purchased machinery for cash, USD 30,000.

Exercise D Prepare the journal entry required for each of the following transactions:
a. Capital stock was issued for USD 200,000 cash.
b. A USD 30,000 loan was arranged with a bank. The bank increased the company's checking account by USD
30,000 after management of the company signed a written promise to return the USD 30,000 in 30 days.
c. Cash was received for services performed for customers, USD 700.
d. Services were performed for customers on account, USD 1,200.
Exercise E For each of the following unrelated transactions, give the journal entry to record the transaction.

Then show how the journal entry would be posted to T-accounts. You need not include explanations or account
numbers.
a. Capital stock was issued for USD 100,000 cash.
b. Salaries for a period were paid to employees, USD 24,000.
c. Services were performed for customers on account, USD 40,000.
Exercise F Explain each of the sets of debits and credits in these accounts for Tuxedos, Inc., a company that
rents wedding clothing and accessories. There are 10 transactions to be explained. Each set is designated by the
small letters to the left of the amount. For example, the first transaction is the issuance of capital stock for cash and
is denoted by the letter (a).

Cash Dividends
(a) 200,000 (b) 150,000 (e) 1,000
(d) 1,800 (e) 1,000
(f) 600
(g) 2,000
(i) 30,000

Bal. ' 18,200
Accounts Receivable Service Revenue
(c) 1,800 (d) 1,800 (c) 1,800
(J) 12,000 (J) 12,000
Bal. 12,000 Bal. 13,80C
Supplies on Hand Rent Expense
(b) 150,000 (f) 600
(i) 30,000
Bal. 180,000
Accounts Payable Delivery Expense
(h) 800 (h) 800
Capital Stock Salaries Expense
(a) 200,000 (g) 2,000
Exercise G Assume the ledger accounts given in the previous problem are those of Tuxedos, Inc., as they
appear at 2010 December 31. Prepare the trial balance as of that date.

Exercise H Prepare journal entries to record each of the following transactions for Sanchez Company. Use the
letter of the transaction in place of the date. Include an explanation for each entry.

Accounting Principles: A Business Perspective 105 A Global Text