Question

On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances: Debit $ 43,900 Credit Accounts Cash 46,900 Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable 8,700 76,000 $ 10,200 15,800 Common Stock, $1 par value Additional Paid-in Capital 12,000 92,000 Retained Earnings 45,500 $175,500 $175,500 Totals During January 2021, the following transactions occur: 2 Issue an additional 2,100 shares of $1 par value common stock for $42,000 January 9 Provide services to customers on account, $17,200. January January 10 Purchase additional supplies on account, $6, 100 January 12 Purchase 1,400 shares of treasury stock for $18 per share January 15 Pay cash on accounts payable, $17,700. January 21 Provide services to customers for cash, $50,300 January 22 Receive cash on accounts receivable, $17,800 January 29 Declare a cash dividend of $0.40 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 12,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.) January 30 Resell 400 shares of treasury stock for $20 per share. January 31 Pay cash for salaries during January, $43,200 The following information is available on January 31, 2021. a. Unpaid utilities for the month of January are $7,400. b. Supplies at the end of January total $6,300. c. Depreciation on the equipment for the month of January is calculated using the straightline method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $11,200. d. Accrued income taxes at the end of January are $2,300.

Answer 1

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. Jan.2 $ 42,000.00 Cash Common Stock (2100 x $1) Additional Paid In Capital (To record issue of common stock) 2,100.00 39,900.00 Jan.9 $ 17,200.00 Accounts Receivables Service Revenue (To record Service provided on account) $ 17,200.00 Jan.10 6,100.00 Supplies Accounts Payable (To record supplies purchased on account) $ 6,100.00 Jan.12 25,200.00 Treasury Stock (1400 x $18) Cash (To record Treasury Stock purchased) $ 25,200.00 Jan.15 $ 17,700.00 Accounts Payable Cash (To record payment of payables) $ 17,700.00

Jan.21 $ 50,300.00 Cash Service Revenue (To record Service provided for cash) 50,300.00 Jan.22 $ 17,800.00 Cash Accounts Receivables (To record Collection of receivables) 17,800.00 Jan.29 $ 5,080.00 Retained Earnings (12000+2100-1400)x$0.40 Dividends Payable (To record Declaration of Dividends) 5,080.00 Jan. 30 8,000.00 Cash (400 x $20) Treasury Stock (400 x $18) Additional Paid In Capital (To record Sale treasury stock) 7,200.00 800.00 Jan.31 $ 43,200.00 Salaries Expense Cash |(To record payment of Salaries Expense) 43,200.00