Question

Transaction 1

On March 1, the three classmates opened a checking account for The Wire at a local bank. They each deposited $25,000 in exchange for shares of stock. A few of their friends also purchased stock for $10,000 that was deposited in The Wire account.

Transaction 2

The company quickly acquired $41,000 in inventory, 60% of which was acquired on open accounts that were payable after 30 days. The rest was paid for in cash.

Transaction 3

A one-year store rental lease was signed on March 1 for $1,200 per month, and rent for the first 3 months was paid in advance. [Note: Record the complete entry for the March 1 transaction first and the complete adjusting entry on March 31 second.]

Transaction 4

The owners paid $4,000 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $7,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry].

Transaction 5

Sales were $66,000. Cost of merchandise sold was 75% of sales. 65% of sales were on open account. [Note: Record the complete entry for the sales first and the complete entry for the expenses second]

Transaction 6

Wages and salaries in March were $11,200, of which $8,200 was actually paid to employees.

Transaction 7

Miscellaneous expenses were $1,900, all paid for with cash.

Transaction 8

On March 1, fixtures and equipment were purchased for $5,000 with a downpayment of $1,500 and a $3,500 note, payable in one year. Interest of 6% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 12 years with no expected salvage value. [Note: Record the complete entry for the March 1 equipment purchase first, the March 31 depreciation adjusting entry second, and the March 31 interest adjusting entry third. Also, round all answers to the nearest cent.]

Transaction 9

Cash dividends totaling $4,800 were paid to stockholders on March 31.

Answer 1