ACG 3113 Practice Set 2

 

ACG 3113 Practice Set 2

 

The Gremlin Ice Cream Company started business July 1, 2000.  Gremlin uses the perpetual inventory system.

 

Required:  Using Excel, prepare general journal entries in good form for only the transactions listed below (Explanations are not necessary):

 

July 1 2000     Issued 5,000 shares of $1 par value common stock for $95,000 cash.

 

July 1              Rented building space, paying three month’s rent of $24,000 in advance.  (Use a real or permanent account for the building rent).

 

July 6              Rented equipment at a cost of $600 per month, paying $6,000 upon signing the rental agreement.  (Use a nominal or temporary account for the equipment rental)

 

July 7              Purchased ice cream on account for $2,000.

 

July 8              Purchased supplies on account for $560.  (Use a real or permanent account for the supplies)

 

July 12            Recorded cash sales in the amount of $2,500.  The ice cream sold cost $800.

 

July 14            Paid wages of $1,800. 

 

July 15            Paid two-year insurance premium of $2,900.  (Use a real or permanent account for the insurance). The insurance is effective today.

 

July 16            Recorded sales on account of $2,600.  The ice cream sold cost $675.

 

July 17            Paid for the ice cream purchased on the 7th and the supplies purchased on the 8th.

 

July 18            Purchased store equipment for $45,000.  Paid $12,000 in cash and signed a 2-year 10% Note for the remainder.

 

July 21            Received an invoice for the month’s utilities of $650.  The bill is due on August 12th and will be paid then.

 

July 27            Received a cash payment of $2,600 for goods sold on account on July 16.