Journal Entries
Blob Inc. purchased a building and land. they were listed for $1 million, Blob offered $500k, the seller counter-offered 750k. Blob accepted the offer for 500k for the building and 150k for the land. What amount will Blob record the land in their books?
150k
(adjusting journal entry) Blob Inc. pays $7500 on May 1 for one year of insurance. What is the adjusting entry on Dec 31?
debit insurance expense for 5000; credit prepaid insurance for 5000
(adjusting journal entry) depreciation of equipment is $40 for the month. What is debited and credited?
debit depreciation exp.; credit accumulated depreciation
What is the accounting equation?
assets=liabilities+equity or assets-liabilities=equity
What is debited/credited when a retailer buys inventory?
debit inventory; credit a/p or cash
Blob Inc. issues $98,000 worth of stock in exchange for cash. What will Blob Inc. debit and credit?
debit cash; credit common stock
The unadjusted trial balance shows supplies with a balance of $2400. At the end of the business cycle, there is $1200 worth of supplies on hand. What is the adjusting entry?
Blob Inc. purchased equipment for $100,000. Expected useful life is 20 years. Residual value is $20,000. What is the annual depreciation expense?
(100000-20000)/20= 4000
What is the net income equation? which financial statement can it be found on?
revenue-expenses; income statement
what is debited and credited when a merchandiser sells inventory? (hint: there are two total entries for this type of transaction)
1st: debit a/r or cash; credit revenue
2nd: debit COGS; credit inventory
Blob Inc. purchased $4235 worth of merchandise on account. What will Blob Inc. debit and credit?
debit inventory; credit a/p
$1200 in unearned service revenue has been provided during November. What is the adjusting journal entry?
debit unearned service rev 1200; credit service revenue 1200
If the annual depreciation expense for equipment is 4000, what is the total accumulated depreciation after 6 years?
24000
How is ending retained earnings calculated? which financial statement can it be found on?
beg. RE+ net income- dividends; found on SSE (extra 100 points: also found on balance sheet)
What is debited/credited when the seller bears the freight cost? buyer?
seller: debit delivery expense; credit cash- FOB destination
buyer: debit inventory; credit cash- FOB shipping point
Blob Inc. pays $400 towards accounts payable. What is the journal entry?
debit 400 a/p; credit 400 cash
salaries owed but not yet paid are $5200. What is the adjusting journal entry?
Equipment was purchased for 20,000. residual value is 10,000. expected useful life is 5 years. What is the book value after 3 years? (hint: calculate total accumulated depreciation after 3 years first)
20,000-(((20,000-10,000)/5)*3)= 20,000-6,000= 14,000
How is gross profit calculated? extra points: which financial statement can it be found on?
sales revenue-cost of goods sold; income statement
What does the seller debit/credit for sales returns and allowances before payment? buyer?
seller- debit sales returns and allowances; credit a/r (credit cash if payment was made)
buyer- debit a/p (debit cash if payment was already made); credit inventory
Blob Inc. receives $500 cash for services that have not yet been performed. What is the journal entry for this transaction?
debit cash 500; credit unearned revenue 500
Interest of $40 was paid on account. What is the adjusting journal entry?
debit interest expense 40; credit interest payable 40
The book value for equipment after 3 years is 14,000. It was sold at the end of the third year for 17,000. What is the gain or loss on the sale?
3,000 gain
name the differences between operating, investing, and financing activities (see cash flows notes).
operating- related to day-to-day operations
investing- related to changes in long term liabilities and equity
financing- related to changes in long term assets
What does the seller debit/credit when the buyer pays the invoice within the discount period?
Buyer?
seller: debit cash and sales discount; credit a/r
buyer: debit a/p; credit inventory and cash