Question

Record the effect, if any, of the transaction entry or adjusting entry on the appropriate balance sheet category or on the income statement by entering the account name and amount and indicating whether it is an addition (+) or subtraction (-). Column headings reflect the expanded balance sheet equation, items that affect net income should not be shown as affecting stockholders' equity. The first transaction is provided as an illustration a. During the month. Supplies Expense was debited $3,100 for supplies purchased. The cost of supplies used during the month was $1.200. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month. b. During the month, the board of directors declared a cash dividend of $3,000 payable next month. c. Employees were paid $2,520 in wages for their work during the first three weeks of the month. d. Employee wages of $660 for the last week of the month have not been recorded. e. Revenues from services performed during the month totaled 56,120. Of this amount. $3.120 was received in cash and the balance is expected to be received within 30 days. t. A contract was signed with a newspaper for a $240 advertisement the ad ran during this month but will not be paid for until next month. g. Merchandise that cost $816 was sold for $1704. Of this amount, $1,320 was received in cash and the balance is expected to be received within 30 days. h. Independent of transaction o assume that during the month supplies were purchased at a cost of $264 and debited to the Supplies (asset) account A total of $156 of supplies were used during the month. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month. 1. Interest of 5324 has been earned on a note receivable but has not yet been received J. Issued 400 shares of $24 par value common stock for $9.600 in cash. Required: a. Indicate the financial statement effect. b. Prepare the journal entry for the above transactions Answer is not complete. Complete this question by entering your answers in the tabs below.

Answer 1

Question 1 is already answered. So answering the second question and also providing explanation for the understanding and accounting treatment

Explanation Journal Account Title and Explanations Date Amount Debit Amount Credit a 1,900.00 Supplies To Supplies Expense 1,900.00 Declaration of dividend will reduce the amounts f retained earnings as dividend is declared from the past retained profits. Therefore entry will debit the retained earnings and credit the dividend payable as dividend is not yet paid. 3,000.00 b Retained Earnings To Dividend Payable 3,000.00 с 2,520.00 Wages Expense To Cash 2,520.00

Unrecorded expenses will increase the liability as they are to be paid in near future. Therefore entry will be debiting the wages expense and crediting the wages payable account. 660.00 d 660.00 Wages Expense To Wages Payable Revenue earned but not yet received are to be recognized under Account Receivables. e Cash Accounts Receivable To Service Revenue 3,120.00 3,000.00 6,120.00 f 240.00 Advertisment Expense To Accounts Payable 240.00 In this case we need to recognise the full amount for the sale that is $1704 and debit the cash with the amount received $1320 and debit the balance amount $384 under accounts receivable which has not yet received gl Cash Accounts Receivable To Merchandise Sale 1,320.00 384.00 1,704.00

Cost of goods sold 816.00 Cost of goods sold is the amount which has to be recognized from the inventory which either has been utilized or sold during the course of sale. Therfore cost of goods sold will be debited for recognition of expense 816.00 and inventory to be credited to reduce the amount of assets. To Merchandise Inventory h Supplies Expense To Supplies (assets) 156.00 156.00 156.00 Supplies still in hand = $264 -$156 i 324.00 Interest Receivable To Interest Revenue 324.00 j 9,600.00 Cash To Common Stock 9,600.00 Total 27,040.00 27,040.00

	Journal			Explanation
Date	Account Title and Explanations	Amount	Amount
		Debit	Credit
a	Supplies	1,900.00
	To Supplies Expense		1,900.00
b	Retained Earnings	3,000.00		Declaration of dividend will reduce the amounts of retained earnings as dividend is declared from the past retained profits. Therefore entry will debit the retained earnings and credit the dividend payable as dividend is not yet paid.
	To Dividend Payable		3,000.00
c	Wages Expense	2,520.00
	To Cash		2,520.00
d	Wages Expense	660.00		Unrecorded expenses will increase the liability as they are to be paid in near future. Therefore entry will be debiting the wages expense and crediting the wages payable account.
	To Wages Payable		660.00
e	Cash	3,120.00		Revenue earned but not yet received are to be recognized under Account Receivables.
	Accounts Receivable	3,000.00
	To Service Revenue		6,120.00
f	Advertisment Expense	240.00
	To Accounts Payable		240.00
g1	Cash	1,320.00		In this case we need to recognise the full amount for the sale that is $1704 and debit the cash with the amount received $1320 and debit the balance amount $384 under accounts receivable which has not yet received.
	Accounts Receivable	384.00
	To Merchandise Sale		1,704.00
g2	Cost of goods sold	816.00		Cost of goods sold is the amount which has to be recognized from the inventory which either has been utilized or sold during the course of sale.
	To Merchandise Inventory		816.00	Therfore cost of goods sold will be debited for recognition of expense and inventory to be credited to reduce the amount of assets.
h	Supplies Expense	156.00
	To Supplies (assets)		156.00
	Supplies still in hand = $264 -$156
i	Interest Receivable	324.00
	To Interest Revenue		324.00
j	Cash	9,600.00
	To Common Stock		9,600.00
Total		27,040.00	27,040.00