Question

Trans ID Transaction A B С D During the month of October, the company sold three pieces of equipment inventory. Costs were $20,000, $50,000 and $15,000 and sell prices were $40,000, $90,000 and $30,000, respectively. The equipment was sold on account. During the month, $110,000 in checks was collected from customers. $500 of supplies were purchased on account. The company received the electric, gas and phone bills for October's usage for the amount of $900. Customers wired $85,000 in the company's bank account for the payment of equipment sales. The company processed checks and paid vendors $100,000. The company purchased five pieces of equipment inventory for cash. Purchase prices for four of the items were $20,000 each and the fifth cost $45,000. The September payroll was paid in the first week of October. On October 1, the September's accrued interest and October's principle payment was made. E F G H

Please check my work for me.

Answer 1

Your answer is almost correct however following correction is required in below Transactions:

D. Here instead of Crediting Accounts Payable Credit Utilities Payable account that it can show seperately in books of accounts (However accounts payable is also correct).

H. Here Salaries payable will be Debit and Cash will be Credit (Since september payroll is paying in october so cash will go out and the payable we created in previous month will be paid off)

I. The Amount of Interest Payable should be $480 (48000*12%/12months). and respectively Cash will be credit with amount $1480 ($480 Interest + 1000 Principle). I don't know how you wrote $170

Rest everything is absolutely correct.

I hope this clear your doubt.

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