Question

The following selected transactions or events were completed during 20X5 by HUP Inc., a retailer of makeup and skin care products: a. Issued 25,000 shares of its own no-par common shares for $7 per share and received cash in full. b. Borrowed $500,000 cash on a 6%, one-year note, interest payable at maturity on 30 April 20X6. c. Paid $350,000 for leasehold improvements on a shopping mall location that will be the major retail outlet, also paid one year's rent of $100,000 in full. d. Purchased merchandise inventory for resale at a cash cost of $260,000. e. Purchased merchandise inventory for resale on credit for $58,800. f. Sold merchandise that cost $96,000 for $198.000 cash. g. Paid $87,000 cash for operating expenses. h. Paid two-thirds of the balance for the merchandise purchased in (e). i. Paid cash for an insurance premium, $3,600; the premium is for two years' coverage (debit prepaid insurance). j. Counted inventory and had $219,000 of merchandise on hand. k. Paid damages to a customer who was injured through use of a company product, $4,000 cash. Required: 1. Prepare the transactions in a general journal. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet

Answer 1

a) Cash 175000 Common stock 175000 Sooooo b.) Cash J00000 Note Payable cl Builoling 3 sovodo (Leerkeld improvement) Prepaid Broad Runt d. 0.0000 Cash 4 sovou Joventary, 26 over Cash 26oooo el Inventory 58 800 Accounts Payable 58800 Cash 1980vo Sales Revenue (98ero to f g.) Operating Expenses (87000 87000 h. Accounts Payable cash 39200 39200 o Prepard Insurance 3600 3600 को ho he No entry Compensation paid 4000 (loss, damages, Cath yovo

Common stock 1750 175ool 175000 450000 Sorro 260000 198000 87000 39200 3600 yooo 29200 Nate Payable sooro S00000 (Lenhold Impo) Building 350000 100000 100000 cast of Goods Sold 56000 3souro Inventory 260000 58000 58800 1262800 Accounts Payable 56000 Sales Revenry ( 198000 29200158800 19600 11gfono Operating Expense Prepaid Insurance 87000 3600 87600 3600 Loss Damages 4ooo 4000
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Unadjusted Trial Balance Prepaid Rent Cash Inventory Prepaid Insurance Leasehold Propeorament Accounts Payable Notes Payable Common stock Sales Revenum Cost of goods Sold Operating Expense loss. Damages Debit. I credit 29200 262800 100000 3600 352000 19600 500000 1750D 19 8000 Sbodo 87000 yooo Total 892600 892600

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