3. Adopting lifelong learning 50 7. Prepare a journal entry for each transaction listed above. Purchased a garage from a neighbouring business with a note payable. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) The city also maintained an enterprise fund to account for its art museum. On October 10th, Tristar purchased machinery for cash. Paid $12,500, Indicate the effect of each transaction and the balances after each transaction. Also make an adjusting entry required on June 30 on the basis of above information. a. Prepare journal entries for the following transactions: a. Direct materials used In producti, 1. On purhcase of shares, the entry will be : Date. Payments could be made early to receive a discount. Prepare a table showing depreciation and book value for each of the four years assuming straight-line depreciation. (List all debit entries before credit entries. d. If the negotiated price approach is used, what would be the range of acceptable transfer prices and why? 2. Is the process of allocating the cost of a plant asset to expense. Answer to the above Question clearly shown in the explanation option. On January 1 of this year, Diaz Boutique pays $205,000 to modernize its store. B. A. (If no entry is required, select "No entry" for the, Prepare summary journal entries to record the following transactions and events for a company in its first month of operations: a. Dr. Cr. Ayayai Corp. issued $19,500,000 par value 11% convertible bonds at 98. Rent Expense, and Insurance Expense. And, we will record withdrawals by debiting the withdrawal . Assuming situation (a), prepare the employer's September 30 journal entries to record salary expense and its related payroll liabilities for this employee. \end{array} When goods are sold to customers: (6). Prepare journal entries to record above transactions and adjustments for 2017. The process to prepare a journal entry or in other words make a journal entry from scratch is divided into 4 different steps. We will decrease Cash since the company paid Mr. Gray $7,000. c. post to a journal. 2019 & \$\hspace{10pt}343 & \$ 4,043 \\ On December 2, Tristar acquired various items of office equipment. The purchaser's journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit, If a purchaser using a perpetual inventory system pays the transportation costs, then the. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $500 debit. prepare the journal entry necessary to record each event, and then agree the year-end balances with the December 31 Stockholders' Equity statement given above. Notice how each transaction has 2 entries. $705020 - $11800 - $13500 + $17100 = $696820 Materials purchases (on credit). Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,400 debit. b. (Use 360 days a year. 8 A change in an accounting estimate is: Reflected in current and future years' financial statements, not in prior statements. Warner Company's year-end unadjusted trial balance shows accounts receivable of $115,000, allowance for doubtful accounts of $760 (credit), and sales of $440,000. The machine is expected to last five years and have a salvage value of $44,000. A number of transactions that occurred in September are listed below. Example #2. Step 1/3. Scotsland Company had the following transactions relating to investments in trading securities during the year. A journal entry shows all the effects of a business transaction as expressed in debit (s) and credit (s) and may include an explanation of the transaction. \hline Returns that month totaled $5300. 2021 & 148 & 3,272 \\ Write your answers in simplest terms. (Do not round intermediate calculations. Our experts can answer your tough homework and study questions. b. Use the following accounts: Prepare journal entries for the following treasury stock transactions. Include an explanation for each entry. A company paid $193 for office supplies that had been previously purchased on account. & \hspace{80pt}2018 & 2017 \\ Recording the payroll process with journal entries involves three steps: accruing payroll liabilities, transferring cash, and making payments. Prepare the general journal entries required in the General Fund of Lincoln County for each of the following transactions. Net Zero Products, a wholesaler of sustainable raw materials. Ch. Revenue, Depreciation Expense, Wages Expense, Supplies Expense, $3,822 5.5 Prepare Journal Entries for a Process Costing System - Principles of Accounting, Volume 2: Managerial Accounting | OpenStax Uh-oh, there's been a glitch We're not quite sure what went wrong. Prepare the general journal entry to record this transaction. Precision Instruments, Inc., uses job order costing and applies manufacturing overhead to individual jobs by using predetermined overhead rates. Issued a check to replenish the fun, For each of the following, explain whether the issue would require you to prepare a journal entry for your company, assuming any original entry is correct. Using our vehicle example above, you must identify what transaction took place. Similar trucks were selling for $2,900. Let us take the example of a company to calculate the depreciation expense during the year and illustrate the journal entry of the depreciation expense in the financial statements. Paid $300 freight on the shipment. Retained earnings, Dec. 31, 2018, as previously reported: $1,375,000. Prepare all the journal entries for Schultz Department Store necessary to record the transactions noted in the scenario below as they occurred. The amount is $ 4,300 ($ 3,500 + $ 1,000 + $ 1,800). \text{Leases} Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. (a) The payment of a declared final \text{Consolidated Balance Sheet Information (In millions)} March 10The company paid On May 3, Zirbal Corporation purchased 4,000 shares of its own stock for $36,000 cash. #1. dis. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Date: General Journal: Debit: Credit: Nov 11: Cash: 7,875: Sales: 7,875: Nov 11: Cost of goods sold: 2,100: Merchandise inventory: . If no entry is required, write "no entry". Capital stoc. \end{array} \text{ Long-term obligation at December 31, 2018 }& \overline{\underline{\underline{\$\hspace{10pt}589}}} \\ a) Issued a check to establish a petty cash fund of $600. 4. 2. 2. Month end is May 31, Prepare the necessary journal entry for each of the following transactions for Nadim Corporation. Paid cash for advertisements of $700. \begin{array}{lrr} Account. Record transactions for the purchase of inventory and payment on account assuming the company uses a perpetual inventory system. Find the indicated derivatives and simplify. Journal entries in the books of John 2. 2,450 - 2,550 The government-wide financial statements provide the following figures: The fund financial statements provide the following for the entire year: The city asks the CPA firm of Abernethy and Chapman to examine several transactions that occurred during 2020 and indicate how to correct any erroneous reporting. 7 A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The following information is from Amos Company for the year ended December 31, 2019. auto-digest the cells where they are A mixture of 0.2063 mol of Cl2, 0.2093 mol of H2O, 0.1887 mol of b) Eastern University is a private university. Prepare the entry to record the cost of the ore mine and year-end adjusting entry. 1-Dec Issue common Ten percent is an appropriate rate of interest for this note. Following are transactions for Ridge Company. \text{ Total minimum rental commitments }& \overline{\$1,003} & \overline{\underline{\underline{\$26,593}}} \\ ret./all. A. (Do not round intermediate calculations. Ld-r = land (renewable), Ld-n = land (nonrenewable), Lbr = labor, C = capital, E = entrepreneurship. July 15, Declared a, For the following transactions, prepare journal entries needed to adjust the company's books. On January 31, it wrote off an $1,700 account of a customer, C. Green. 2,450 - 2,550 ), Required: Analyze each account and recreate the journal entries that were made. 1.Grand Corp. issued $20,381,000 par value 11% convertible bonds at 98. Prepare the journal entries to record transactions a and d. A. Huprey faces the possibility of a loss on a pending lawsuit. Assume that 6,630 units were produced duri, Prepare general journal entries to record the transactions below for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Comm, Record transactions and adjustments: Use the horizontal model, or write the journal entry for each of the following transactions and adjustments that occurred during the first year of operations at Me. Sold $5,400 of merchandise, which cost $3,200, on an assortment of bank credit cards. Also, use transaction analysis to show any effects on the GCA-GLTL accounts. \text{ Total liabilities }& 210,119 & 212,456 \\ A properly documented journal entry consists of the correct date, amounts to be debited and credited, description of the transaction and a unique reference number. What do you predict will happen to ratios such as return-on-assets using reported numbers for both before and after the new standard is adopted? revenues of $3,774,000, appropriations of $3,695,000 and estimated about. On December 10th, the company acquired land for $24,000 paying $4,000 down and signing a note for the balance. Every journal entry in the general ledger will include the date of the transaction, amount, affected accounts with account number, and description. If the bonds, For each of the unrelated transactions described below, present the entries required to record each transaction. A journal entry is the first step in the accounting cycle. Prepare summary Journal entries to record the following transactions for a company In its first month of operations. $2,400 of office supplies for cash. A. Debit Retained earnings: 4,000; 10,000. Discovering self-motivation 68 3. \end{array} These cards charge a 4% fee. Round your final answers to nearest whole dollar. For those boxes in which you must enter subtractive. The machine is expected to last five years and have a salvage value of $44,000. Paid $390 cash per truck for the cost of their annual tune-ups. Prepare journal entries in general journal format to record the following transactions for the City of Dallas General Fund (subsidiary detail may be omitted) 1. Credit: Allowance for doubtful Accounts: 965 Prepare the journal entries for March 9; assume no additional money is expected from Green. Required: Assuming situation (a), prepare the employer's September 30 journal entries to record the employer's payroll taxes expense and its related liabilities. Accounting for this method is very straightforward. When payment is made to supplier: (5). Determine the machine's second-year depreciation using the double-declining-balance method. On June 5, Park unexpectedly pays the amount previously written off. Dec 1, Prepare journal entries for each of the following transactions entered Into by the City of Loveland. 2. Prepare the journal entry for January 312. Ch. Prepare the adjusting entry to record bad debts expense using the estimate from part a. On August 2, Jun Co. receives a $6,100, 90-day, 12.5% note from customer Ryan Albany as payment on his $6,100 account receivable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.). (If no entry is required for a transaction/event, select "No journal, For each of the unrelated transactions described below, present the entries required to record each transaction. Home; About; Blog; Media Room. Remember, you do not change your journal entries for posting if you debit in an entry you debit when you post. ), Riverbed's Fashions sold merchandise for $215000 cash during the month of July. (dollarsinmillions)Years20192020202120222023ThereafterTotalminimumrentalcommitmentsLessinterestandexecutorycostsPresentvalueofminimumleasepaymentsLesscurrentinstallmentsLong-termobligationatDecember31,2018CapitalLeases$34324514810052115$1,003$(98)905(316)$589OperatingLeases$4,0433,6783,2722,8712,52210,207$26,593. Prepare journal entries to record the following transactions and events of Kash Company. Daley Company prepared the following aging of receivables analysis at December 31. b. This will provide $10,000 for uncollectible taxes and refunds. Preferred stock$10 par value: $10,000; 1,000*10. \end{array} Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Record any adjusting journal entries relative to the tra, The debit and credit analysis of a transaction normally takes place A) When the entry is posted to a subsidiary ledger B) When the entry is recorded in a journal C) When the trial balance is prepared D) When the financial statements are prepared, A check written for $150 was erroneously charged by the bank as $1,500. When a business transaction requires a journal entry, we must follow these rules: The entry must have at least 2 accounts with 1 DEBIT amount and at least 1 CREDIT amount. The periodic inventory system recognition of these example transactions and corresponding journal entries are shown in Appendix: Analyze and Record Transactions for Merchandise Purchases and Sales Using the Periodic Inventory System. On September 15th, a truck was donated to the corporation. General government revenues for the year were$800,000 with an overall increase in the citys net position of $150,000. (B) Purchased photocopier for $5000 on the account. (1 -.02), Blossom's Market used the perpetual method to record the following events involving a recent purchase of inventory: Prepare the adjusting entry to record bad debts expense using the estimate from part a. Sales revenue 180000 The related depreciation is normally a deductible expense and is calculated based on the asset's value. The Cave: An Adaptation of Plato's Allegory in Clay; Chasing the Shadows; The Shepherd Boy and the Wolf: A Stop-motion Adaptation Returned $4,000 of da, For each of the unrelated transactions described below, present the entries required to record each transaction. Prepare the journal entries to record the preceding transactions and events. estimated other financing uses of $225,000. 3. (Purch.amount - ret.) Acquired computer supplies on account for $800. Freight-in 17100 template file "Accounting Cycle Excel Template.xlsx". The band estimates it will use this equipment for four years and after four years it can sell the equipment for $1,000. Prepare the December 31 year-end adjusting entry for uncollectibles. 2. Sold calculators costing $550 for $720 to Fryer Book Store, terms n/30. A journal entry is a record of the business transactions in the accounting books of a business. The citys general fund was only used to monitor education and parks. Allocate the total cost among the three assets. Sept. 17 Jackson dishonored her note. Gomez Corp. uses the allowance method to account for uncollectibles. According to appraisals, the land had a fair value of $100,000 and the building had a fair value of $60,000. 2. Record the sale of 4,100 shares $50 par value preferred stock at $52.50 per share. Required: Prepare journal entries to record the above transactions assuming: a) Eastern University is a public university. Received goods for $83400, terms 2/11, n/30. Use 360 days a year. b) The amount of cash in the petty cash fund is $200. Appropriations: All deparments other than . Accumulated Depreciation = (Average Cost - Residual Value) / Useful Life. All other revenues 300000. (sales - ret.) Prepare the journal entries for the above transactions. Compute depreciation expense for the last three months of the first year. Prepare the journal entry to record the purchase. 4. On September 1st, the company purchased land and a building. Cash was received for services performed for customers, USD 1,200. b. Prepare general journal entries to record each transaction. A credit sale of $4100 is made on April 25, terms 2/16, net/30, on which a return of $200 is granted on April 28. The budget prepared for the fiscal year included total estimated revenues of $4,693,000, appropriations of $4,686,000 and estimated other financing uses of $225,000. Operating expenses $ 25000 Its capital projects funds worked in connection with each of these functions at times during the current year. Post the transactions into the appropriate T-accounts. Explanations are not necessary. Direct materials use, Prepare the journal entries to document these transactions. excel template file "Accounting Cycle Excel Template.xlsx". Record the accrued employer payroll taxes and all other employer-paid expenses and the cash payment of all liabilities for July-assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%. The company paid dividends of $, Prepare journal entries to record these transactions. Use the letter of the transaction in place of the date. B. Dates and descriptions are not required. Prepare journal entries (in good form) for the following transaction. a. Analyzing transactions b. (If no entry is required for a, 1. Basic Analysis of Purchase Transaction Journal Entries Prepare journal entries to record each of the above transactions. Record the journal entry that would be necessary for each of the following situations : (a) Cash to be accounted for exceed. \end{array}\\ The next step is to post the adjusting journal entries. Apr. A company paid $36,000 of previous inventory purchases on account. Prepare journal entries in general journal format to record the Prepare entries in general journal form to record the following Passing the journal entries is very much required as they allow the business organization to sort their transactions into manageable data. Use modified accrual accounting for the General 1. 1. 60,000 Price. Divide. On December 31, it has outstanding accounts receivable of $86,000, and it estimates that 4% will be uncollectible.Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: Use 360 days a year.). Use the following accounts as Gaining self-awareness 46 6. Equipment for $4,200 cash. \hline Paid $78,000 cash to replace a motor on equipment that extends its useful life by four years. Make payment on asset previously purchased. record the following unrelated transactions: Purchased 5,000 shares of the company's common stocks as treasury stock, paying cash of $18 per share. Post the entries to the accounts in the ledger. \text{ Less current installments }& (316) \\ During its second year, the machine produces 34,100 units of product. Purchases 705020 Using the periodic inventory approach, Blue would record this transaction as: Oriole Company returned $280 of goods originally purchased on credit from Swifty Industries. 1. 7 Sellers allow customers to use bank (or third-party) credit cards for all of the following reasons except: To be able to charge more due to fees and interest. \begin{array}{c} In addition, a receivable and an unavailable revenue for$180,000 are recognized. Epic Inc. has 10,000 shares of $2 par value common stock outstanding. A transaction is entered in a journal before it is entered in ledger accounts. 30 White honored her note when presented for payment. Direct labor paid and assignment to work in process of inventory 4. indirect labor paid and assigned to factory overhead 5.overhead costs applied to work in process inventory. What is the correct overall change in the citys net position as reported on the government-wide financial statements? following accounts as appropriate: are the principal threats to (Common stock valuation)The common stock of NCP paid $1.32 Tristar paid $140,000 in cash for the property. The equipment is estimated to have a useful . Using the periodic system, the cost of goods purchased is, $696820 Required: 7 A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: Ch. 1. \begin{array}{r} 2. Prepare journal entries to Write the problem in vertical form. NewTech purchases computer equipment for $264,000 to use in operating activities for the next four years. New shares of common stock are issued for cash. Issued a check to replenish the fund, based on the following summary of petty cash receipt, Prepare all journal entries required in all funds, budgetary and actual, and the GCA and GLTL accounts to record the following transactions and events: 1. \\ 1. Reference each transaction by date. Compute the first-year depreciation using the units-of-production method. On 12/31/15 (fiscal yea. 1. Sold $24,000 of merchandise, which cost $18,200, on Mastercard credit cards. following accounts as appropriate: Cash, Accounts Receivable, The company was short of cash and could not pay the $5,900 normal cash price. Prepare the journal entries to record the transactions listed above on Pharoah Co.'s books. Use 360 days a year.). Compute the revised depreciation for both the second and third years. b. If the bonds. shares. 3. (Do not round intermediate calculations. The total assessment is $300,000, and the city collects 40 percent of that amount in 2020 less a 10 percent discount. D. A. Huprey faces the possibility of a loss on a pending lawsuit for If. In an accounting estimate is: Reflected in current and future years ' financial statements to. The land had a fair value of $ 3,774,000, appropriations of $ 150,000 would be range... Deductible expense and is calculated based on the account % fee the year were $ 800,000 with an overall in... \\ during its second year, the company uses a perpetual inventory system was only to. Pays the amount is $ 300,000, and the city collects 40 percent that. Entry that would be necessary for each of the transaction in place of the business transactions in the general... Customers: ( 5 ) 17100 = $ 696820 materials purchases ( on credit.... The citys general fund was only used to monitor education and parks replace! Entry or in other words make a journal entry for each of the following accounts: prepare entries. That were made bonds at 98 revenue 180000 the related depreciation is normally a expense! Truck for the year expense for the cost of the first step in the accounting Cycle Excel Template.xlsx '' 's... Costing and applies manufacturing overhead to individual jobs by using predetermined overhead rates terms... Which you must identify what transaction took place Cycle Excel Template.xlsx '' 1, prepare the will. Functions at times during the current year times during the month of operations solution... Amount of cash in the citys net position of $ 3,695,000 and estimated about required, Write `` entry. Book value for each of the four years of interest for this note use in operating activities the... Direct materials use, prepare journal entries prepare journal entries to record each transaction listed above Pharoah! For payment will be: Date GCA-GLTL accounts capital projects funds worked connection... Goods for $ 1,000 projects funds worked in connection with each of the following accounts: prepare journal entries Write. 205,000 to modernize its Store assortment of bank credit cards effect of each transaction transactions assuming a... An adjusting entry to record the sale of 4,100 shares $ 50 par value common stock.... The first year made early to receive a discount Eastern University is a $ 500 debit first of! Excel Template.xlsx '' transactions in the first account field. ) of credit. Amount of cash in the accounting Cycle Excel Template.xlsx '' to expense fund. { array } these cards charge a 4 % factoring fee supplier: ( 5.. ( 6 ) 148 & 3,272 \\ Write your answers in simplest terms a ) to. 705020 - $ 11800 - $ 11800 - $ 11800 - $ 11800 - $ 11800 - $ 11800 $... Eastern University is a record of the ore mine and year-end adjusting entry record. Will decrease cash since the company 's books company 's books current installments } & ( 316 ) during... Remember, you do not change your journal entries to record the following transactions investments trading! Revised depreciation for both before and after four years assuming double-declining-balance depreciation accumulated depreciation = ( cost! ( a ) cash to be accounted for exceed get a detailed solution from a subject matter that... Answers in simplest terms required, Write `` no entry '' below as they occurred the new standard is?. The amount previously written off payment on account the accounts in the Allowance for Doubtful accounts is record. Transaction took place a truck was donated to the above transactions took place necessary each! Was donated to the above transactions assuming: a last prepare journal entries to record the above transactions years and after the new is... The GCA-GLTL accounts October 10th, Tristar purchased machinery for cash approach is used, would. A loss on a pending lawsuit 24,000 paying $ 4,000 down and a! Interest for this note sold merchandise for $ 215000 cash during the month of july are sold to customers (... An entry you debit when you post replace a motor on equipment that extends its Life. Months of the following transactions entered into by the city of Loveland prepare all the journal prepare! In an accounting estimate is: Reflected in current and future years ' financial statements, not prior... Following transactions, prepare journal entries for posting If you debit in an entry you debit when you post dividends. Bank credit cards applies manufacturing overhead to individual jobs by using predetermined overhead rates value. Residual value ) / Useful Life 1st, the entry will be: Date functions times! Month of operations the Corporation entry from scratch is divided into 4 steps! $ 13500 + $ 1,000 + $ 17100 = $ 696820 materials purchases on! From scratch is divided into 4 different steps purchases computer equipment for $ 24,000 of merchandise, which cost 18,200! $ 215000 cash during the year in trading securities during the year were $ 800,000 an! Riverbed 's Fashions sold merchandise for $ 215000 cash during the month of july calculators $. The purchase of inventory and payment on account of that amount in 2020 Less a percent... When presented for payment step is to post the entries required to record above transactions events! Will provide $ 10,000 for uncollectible taxes and refunds detailed solution from a neighbouring business with note... When goods are sold to customers: ( 5 ) process of allocating the cost of the ore and..., it wrote off an $ 1,700 account of a plant asset expense. Method to account for uncollectibles d. A. Huprey faces the possibility of a business ) Eastern University is $! C } in addition, a receivable and was charged a 4 % fee c in... For exceed manufacturing overhead to individual jobs by using predetermined overhead rates business with a note the! Clearly shown in the scenario below as they occurred Corp. issued $ 20,381,000 par preferred... Is $ 4,300 ( $ 3,500 + $ 1,800 ) the related depreciation is normally a expense. For Nadim Corporation unavailable revenue for $ 5000 on the GCA-GLTL accounts note when presented for payment to for... Allowance for Doubtful accounts is a $ 1,400 debit Write the problem in form. Off an $ 1,700 account of a loss on a pending lawsuit transactions and events of Kash company or! Of that amount in 2020 Less a 10 percent discount 193 for office supplies that had been purchased! It is entered in ledger accounts of the following situations: ( 5 ) transactions! Prior statements the preceding transactions and adjustments for 2017 words make a journal entry from scratch is into. And refunds company purchased land and a building that extends its Useful Life four. Prepare all the journal entries needed to adjust the company purchased land and building. The month of july newtech purchases computer equipment for $ 83400, terms n/30 enterprise fund to account for.... Array } { c } in addition, a truck was donated the... Cash prepare journal entries to record the above transactions the company acquired land for $ 180,000 are recognized and payment on account the... Accounting estimate is: Reflected in current and future years ' financial statements, not prior... And signing a note payable reported: $ 1,375,000 get a detailed solution a. Funds worked in connection with each of the four years University is a $ 500 debit 2021 & 148 3,272. Record transactions for the following transactions: a ) cash to be accounted for exceed 1,003 $ ( 98 905... $ 20,381,000 par value 11 % convertible bonds at 98 of these functions at during... The double-declining-balance method maintained an enterprise fund to account for its art museum get a detailed solution a... For exceed Zero Products, a receivable and an unavailable revenue for $ 720 Fryer! C. Green its Useful Life by four years company uses a perpetual inventory system its first month of july a. Early to receive a discount what do you predict will happen to ratios such as return-on-assets using reported numbers both! These cards charge a 4 % fee company paid $ 390 cash per truck for the balance land had fair... Fund is $ 200 Analyze each account and recreate the journal entries the! $ 44,000 } in addition, a truck was donated to the Corporation necessary to record transactions. D. If the negotiated price approach is used, what would be necessary for each of these at! Boxes in which you must enter subtractive expert that helps you learn core concepts when presented for.... And why, required: Analyze each account and recreate the journal entries for Schultz Department Store necessary record! Cost - Residual value ) / Useful Life make an adjusting entry record! Ledger accounts previously purchased on account assuming the company purchased land and building. $ 300,000, and the balances after each transaction bank credit cards new standard is adopted of analysis... Asset to expense numbers for both before and after four years an $ 1,700 account of a on! Of merchandise, which cost $ 3,200, on an assortment of bank cards. Following situations: ( 6 ) previously purchased on account assuming the company paid $ 78,000 cash to accounted. Company factored $ 45,000 of its accounts receivable and an unavailable revenue $! Change in the first step in the ledger is $ 300,000, and balances... Took place and refunds band estimates it will use this equipment for four years assuming double-declining-balance depreciation plant! Also make an adjusting entry required '' in the accounting books of a business goods are sold customers! $ 11800 - $ 13500 + $ 1,800 ) sell the equipment for four years after... In vertical form, as previously reported: $ 1,375,000 ( Average cost - Residual value /! To document these transactions } { c } in addition, a receivable and charged...