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Chapter 3

Chapter 3. Journal Entries for Expense Transactions. Homework E3-5. Homework E3-5. E3-4. McGraw-Hill Publishing Company uses $2,754 worth of electricity and natural gas in its headquarters building for which it has not yet been billed.

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Chapter 3

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  1. Chapter 3 Journal Entries for Expense Transactions

  2. Homework E3-5

  3. Homework E3-5

  4. E3-4

  5. McGraw-Hill Publishing Company uses $2,754 worth of electricity and natural gas in its headquarters building for which it has not yet been billed. Note: Expense is incurred when utilities are used and can be recorded when amount is known.

  6. At the beginning of January, Turner Construction Company pays $846 for magazine advertising to run in monthly publications of the first three months of the year.

  7. Dell pays its computer service technicians $379,500 in salaries for two weeks ended January 7. • ASSUME: No Salaries Payable has been previously recorded.

  8. The University of Florida orders 60,000 season football tickets from its printer and pays $7,610 in advance for the custom printing. The first game will be paid in September. Answer from the University's standpoint.

  9. The campus bookstore receives 500 accounting texts at a cost of $89 each. The terms indicate that payment is due within 30 days of delivery.

  10. During the last week of January, the campus bookstore sold 450 accounting texts received in part e at a sales price of $150 each. Assume cost data from part e (cost of $89 per book)

  11. Fucillo Hyundai, Inc. pays its salespersons $13,200 in commissions related to December automobile sales. Assume: Company had previously recorded commissions payable.

  12. On January 31, Fucillo Hyundai, Inc. determines that it will pay its salespersons $14,470 in commissions related to January sales. The payment will be made in early February. Answer from Fucillo’s perspective.

  13. A new grill is purchased and installed at a Wendy’s restaurant at the end of the day on January 31; a $12,750 cash payment was made on that day.

  14. Carousel Center Mall had janitorial supplies costing $4,000 in storage. An additional $2,600 worth of supplies was purchased during January. At the end of January, $1,410 worth of janitorial supplies remained in storage. Assume: Purchase of supplies was properly recorded, just recording the supplies used.

  15. An Iowa State University employee works eight hours, at $13 per hour, on January 31; however, payday is not until February 3. Answer from the perspective of the university.

  16. Wang Company paid $3,600 for a fire insurance policy on January 1. The policy covers 12 months beginning January 1.

  17. Darrius Incorporated has its delivery van repaired in January for $300 and charges the amount on account.

  18. Hass Company, a farm equipment company, receives its phone bill at the end of January for $202 for January calls. The bill has not been paid to date.

  19. Martin Company receives and pays in January a $1,285 invoice (bill) from a consulting firm for services received in January.

  20. Parillo’s Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December.

  21. Phillips-Van Heusen Corporation completes production of 500 men’s shirts ordered by Macy’s Department Store at a cost of $10 each and delivers the order. Note: No information was provided about sales information. Would have been Accounts Receivable and Sales Revenue.

  22. E3-13 • Do in your Groups • PREPARE JOURNAL ENTRIES • Determine Cash Flow Category • (Operating, Investing, Financing, Non-Cash Operating, Non-Cash Investing and Financing)

  23. a. Received $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in accounts receivable, $5,300 in equipment, a van (equipment) appraised at a fair market value of $13,000 and $1,200 in supplies. Cash flow from FINANCING ACTIVITIES.

  24. b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and signing a 10-year mortgage from a local bank for the rest. Cash flow from INVESTING ACTIVITIES ($72,000) and Non-Cash Investing and Financing Activity ($288,000).

  25. c. Borrowed $50,000 from the local bank on a 10%, one year note. Cash flow from FINANCING ACTIVITIES.

  26. Purchased and used food and paper supplies costing 10,830 in March; paid cash. Purchase of Supplies: Use of Supplies: Cash flow from OPERATING ACTIVITIES. Non-Cash OPERATING ACTIVITIES.

  27. e. Catered four parties in March for $4,200; $1,600 was billed and the rest was received in cash. Cash flow from OPERATING ACTIVITIES ($2,600); Non-Cash Operating Activity ($1,600).

  28. f. Made and sold food at the retail store for $11,900 cash. (assume the cost of these sales was already recorded as part of transaction d.) Cash flow from OPERATING ACTIVITIES.

  29. g. Received a telephone bill for March to be paid in April. Non-Cash OPERATING ACTIVITIES.

  30. h. Paid $363 in gas for the van in March. Cash flow from OPERATING ACTIVITIES.

  31. i. Paid $6,280 in wages to employees who worked in March. Cash flow from OPERATING ACTIVITIES.

  32. j. Paid a $300 dividend from the corporation to EACH owner. Cash flow from FINANCING ACTIVITIES.

  33. k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $20,000 (added to the cost of the building); paid cash. Cash flow from INVESTING ACTIVITIES.

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