Updat lternative Problems PROBLEMS The Tazmanian Hat Company

Updat lternative Problems PROBLEMS The Tazmanian Hat Company began business in July 2013. During July, the following transactions occurred: Jul. Issued common stock in exchange for $1,000,000 cash. Purbhased inventory on account for $80,000 (che perpetual inventory system is used). Paid the company\'s landlord $10,000 for rent for the upcoming year Sold merchandise on account for $120,000. The cost of the merchandise was $75,000. Borrowed $ 50,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in one year. Paid employees $15,000 wages for the first half of the month. Paid $50,000 to suppliers for the merchandise purchased on July 2. Collected $60,000 on account from customers. Paid various utility bills of $1,500 for the month of July. Paid $8,000 in insurance for the period August 1, 2013 to October 1, 2014. 1 2 4 10 15 20 24 26 28 31 Required: . Prepare general journal entries to record each transaction. Omit explanations. 2. Post the entries to T-accounts. 3. Prepare an unadjusted trial balance as of July 31, 2013. F4 FS F6 F7 FB F9 F10

Solution

1.

2.

3.

Date	General Journal	Debit	Credit
Jul. 1	Cash	1000000
	Common stock		1000000
2	Inventory	80000
	Accounts payable		80000
4	Prepaid rent	10000
	Cash		10000
10	Accounts receivable	120000
	Sales revenue		120000
	Cost of goods sold	75000
	Inventory		75000
15	Cash	50000
	Notes payable		50000
20	Wages expense	15000
	Cash		15000
24	Accounts payable	50000
	Cash		50000
26	Cash	60000
	Accounts receivable		60000
28	Utility expense	1500
	Cash		1500
31	Prepaid insurance	8000
	Cash		8000