Question

LO E2-33B. (Learning Objective 4: Journalize entries and calculate ending balances) The first seven transactions of Gallagher Advertising, Inc., have been posted to the company's accounts: Cash Supplies 900 (5) Land (1) 8,8004) ,00 (3) (2) 8,500 (6) 90(4) 34,000 7) 4,000 290 90 (7 4,000 Accounts Payable 290 (3) Note Payable Common Stock (2) 8,500 (4) 23,000 900 (1) 8,800 Requirement 1. Prepare the journal entries that served as the sources for the seven transactions. Include an explanation for each entry. Determine the ending balance in each account. As Gallagher moves into the next period, how much cash does the business have? How much does Gal- lagher owe in total liabilities?

The first seven transactions of Gallagher Advertising, Inc., have been posted to the company’s accounts:
LO 4

Answer 1

Journal Entries Date Account Title and Explaination Post. Ref Debit Credit Cash S8,800.00 Common Stock S8,800.00 To record issue of common stock) Cash S8,500.00 Notes Pavable S8,500.00 To record borrowed cash through issue of note) Supplies S900.00 Accounts Pavable S900.00 To record purchase of supplies on account) Land $34,000.00 Cash S11,000.00 $23,000.00 Notes Payable (To record purchase ofLand by cash and issuing note)

Determination of ending balances: Cash 8800+8500+90-11000-290-4000 Supplies 900-90 Land Equipment Accounts Payable 900-290 Notes Payable 8500+23000 Common Stock Debit Credit 2100 810 34000 4000 610 31500 8800 Business have cash balance of S2100 at the end of period. They owe total liabilities of 610+31500-S32110 at rhe end of the period.