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Record the owner’s investment in the company inventory. On July 1, 2017, you, the company owner,...

Record the owner’s investment in the company inventory.

On July 1, 2017, you, the company owner, have invested $15,000 of your own money into the business in order to purchase the inventory owned by a small manufacturer. The manufacturer you bought out had $800 in Raw Materials Inventory, $1,200 in Work in Process, and $500 in Finished Goods Inventory. The remainder of the cash that was not spent was put into the company’s cash account.

What would the journal entry look like for this?

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Answer #1

Solution:

Journal Entries
Date Particulars Debit Credit
01-Jul-17 Cash Dr $12,500.00
Raw materials inventory Dr $800.00
Work In Process inventory Dr $1,200.00
Finished goods inventory Dr $500.00
      To Owner's capital $15,000.00
(To record owner's investment)
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