Accounting II - Chapter 9

Accounts Payable/Douglas's Office Supplies, Accounts Payable/McKoy Equipment Company, and Accounts Payable/Sully Office Repair are all classified as:

Liabilities

Ben's Barbershop's balance sheet contains no inventory account. This company would be classified as a:

Service Business

Darlings Incorporated sold baby equipment on account to Nanny's Boutique, $1,000 plus sales tax, $150, for a total of $1,150, Sales Invoice No. 11. The correct entry to record this transaction is:

debit Account Receivable/Nanny's Boutique, $1,150; credit Sales-Baby Equipment, $1,000, Sales Tax Payable, $150.

Booming Corporation returned some cracked CDs to Hear All Supply Company, $100, from Purchase Invoice No. 5, Debit Memo No. 55. The journal entry to record the transaction is:

debit Accounts Payable/Hear All Supply Company, $100; credit Purchases Returns and Allowances-CDs, $100.

Hal-Mart Corporation paid cash for video department advertising expense, $500, Check No. 89. The correct journal entry to record the transaction is:

debit Advertising Expense-Video, $500; credit Cash, $500.

Daisy Corporation received cash on account from Hamilton's Music Store, $1,164, covering Sales Invoice No. 88 for CDs, $1,200 ($1,000 plus sales tax $200), less a 3% discount, $36, Receipt No. 81. The journal entry to record the transaction is:

debit Cash $1,164, Sales Discount-CDs, $36; credit Accounts Receivable/Hamilton's Music Store, $1,200.

Betty Lou's Variety Store recorded cash and credit card sales of shoes, $500, pocketbooks, $300, and sales tax, $50, for a total of $850, Tape 33. The journal entry to record the transaction is:

debit Cash, $850; credit Sales-Shoes, $500, Sales-Pocketbooks, $300, Sales Tax Payable, $50.

Booming Corporation purchased CDs on account from Hear All Supply Company, $500, Purchase Invoice No. 5. The correct entry to record the transaction is:

debit Purchases-CDs, $500; credit Accounts Payable/Hear All Supply Company, $500.

Starling Corporation paid cash for rent expense, $700, Check No. 58. The correct journal entry for the transaction is:

debit Rent Expense, $700; credit Cash, $700.

Blastin' Sound Music shop has $2,000 in Salaries-Audio, $2,500 in Salaries-Video, $325 in Social Security withholding, $85 in Medicare withholding, $400 in federal income tax withholding, $300 in state income tax withholding, and $240 in life insurance premiums withholding. The correct entry for recording this company payroll is:

debit Salary Expense-Audio, $2,000, Salary Expense-Video, $2,500; credit Social Security Tax Payable, $325, Medicare Tax Payable, $85, Federal Income Tax Payable, $400, State Income Tax Payable, $300, Life Insurance Premiums Payable, $240, Cash $3,150.

Bertha's Bookstore has $1,000 in Salaries-Books, $2,000 in Salaries-Audio, $200 in Social Security withholding, $80 in Medicare, $300 in federal income tax withholding, $280 in state income tax withholding, and $150 in life insurance premiums. The correct entry for recording the company payroll is:

debit Salary Expense-Books, $1,000, Salary Expense-Audio, $2,000; credit Social Security Tax Payable, $200, Medicare Tax Payable, $80, Federal Income Tax Payable, $300, State Income Tax Payable, $280, Life Insurance Premiums Payable, $150, Cash, $1,990.

Candy Corporation issued a credit to Sweet Shop for damaged candy, $50, plus sales tax, $6, total $56, from Sales Invoice No. 5, Credit Memo No. 46. The journal entry to record the transaction is:

debit Sales Returns and Allowances-Candy, $50, Sales Tax Payable, $6; credit Accounts Receivable/Sweet Shop, $56.

Jones Corporation paid cash for Administrative Supplies, $500, Check No. 24. The journal entry to record the transaction is:

debit Supplies-Administrative, $500; credit Cash, $500.

Smith Corporation paid cash for audio department supplies, $800, Check No. 56. The journal entry to record the transaction is:

debit Supplies-Audio, $800; credit Cash, $800.

Jan's Corporation paid cash for Utilities Expense, $600, Check No. 36. The journal entry for the transaction is:

debit Utilities Expense, $600; credit Cash, $600.