Question

• Prepare the necessary journal entries for the above transactions; if a journal entry is not required explain why.
  Jan The owners, Brad & Jennifer, each put up $250,000 cash as an initial investment into the company. 2 Purchased a pizza oven for $22,000. 3 Purchased inventory from Sysco Company on account for $21,000. 4 Hired five employees to begin work on Feb 15; the salaries for each employee will be set at $12/hour and they are each expected to work 20 hours per week. 5 Took out a loan with TD Bank for $50,000 payable in 90 days. Purchased land adjacent to the restaurant for customer parking at a cost of $10,000; the company paid $5,000 cash and signed a note for the balance due December 31, 2018. 7 Brad purchased a garage behind the restaurant to store personal items for $15,000 cash. 8Purchased a trademark for the company's pizza logo for $21,000 cash. 9 Ashley, Jennifer's sister, decided to join the partnership, and put up $250,000 as an initial investment. 10 Returned spoiled inventory purchased on Jan 3 for a credit equal to $11,000; no sales had occurred at this time. 11 Paid the Sysco Company account balance in-full. 12 Purchased short term investments equal to $5,000 cash. 13 Took out a bank loan with CIBC Bank for $1,000 payable in 10 years. 14 Purchased inventory from HSJ Foods for $10,000: 50% paid cash and the rest on account. 15 Provided a cash loan to a local supplier equal to $15,000; the loan must be repaid within 30 days. 16 Paid insurance on the store front in-advance for $1,500 cash; the coverage begins Feb 1. 19 Declared a dividend of $2,000 for each of the owners. 31 Depreciation on the pizza oven for January was calculated as $1,000. 31 Paid the dividend in-full declared on Jan 19. 31 Income tax payable for the month was calculated as $1,700. 31 The ending balance of the short term investments at January 31 was $2,000. 31 Sales for the month of January totalled $80,000 of which $1,000 was owed on account. 31 | Cost of goods sold for the month of January was $19,000
  

Answer 1

Trans	General Journal	Debit	Credit
1-Jan	Cash	$    25,000.00
	Capital		$    25,000.00
2-Jan	Pizza Oven	$    22,000.00
	Cash		$    22,000.00
3-Jan	Inventory	$    21,000.00
	Sysco Company		$    21,000.00
5-Jan	Cash	$    50,000.00
	Bank Loan		$    50,000.00
6-Jan	Land (Parking Space)	$    10,000.00
	Cash		$      5,000.00
	Notes Payable		$      5,000.00
8-Jan	Trademark	$    21,000.00
	Cash		$    21,000.00
9-Jan	Cash	$ 250,000.00
	Capital (Partner's Capital)		$ 250,000.00
10-Jan	Sysco Company	$    11,000.00
	Inventory		$    11,000.00
11-Jan	Sysco Company	$    10,000.00
	Cash		$    10,000.00
12-Jan	Short-term Investments	$      5,000.00
	Cash		$      5,000.00
13-Jan	Cash	$    15,000.00
	Bank Loan		$    15,000.00
14-Jan	Inventory	$    10,000.00
	HSJ Foods		$      5,000.00
	Cash		$      5,000.00
15-Jan	Local Supplier (Loan)	$    15,000.00
	Cash		$    15,000.00
16-Jan	Prepaid Insurance	$      1,500.00
	Cash		$      1,500.00
19-Jan	Dividend	$      4,000.00
	Dividend payable		$      4,000.00
31-Jan	Depreciation	$      1,000.00
	Pizza Oven		$      1,000.00
31-Jan	Dividend payable	$      4,000.00
	Cash		$      4,000.00
31-Jan	Income tax Expenses	$      1,700.00
	Income tax payable		$      1,700.00
31-Jan	Cash	$    79,000.00
	Accounts receivable	$      1,000.00
	Sales		$    80,000.00
31-Jan	Cost of goods sold	$    19,000.00
	Inventory		$    18,000.00
	Depreciation		$      1,000.00

Note. 1 Hiring of Employees doesnot requires a journal entry as employees has neither started working nor any payment is made to them in advance

Note. 2 Purchase of Garge to store personal items is not a business expenditure and therefore shall not be recorded

Note. 3 Short term investments are marked to market on Balance sheet date and 31st Dec being the balance sheet date, no adjustment relating to the decline in the value of investments are made on 31st Jan.