Business in exchange for additional common stock

Assignment Help Financial Accounting

Reference no: EM13916892

Post the following journal entries to the accounts.

The following events occur in July 2014:

July 1 - You take $15,000 from your personal savings account and buy common stock in Peyton

Approved.

July 1-Purchase $8500 in baking supplies from vendor, on account

July 3 - Your parents lend the company $10,000 cash, in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.

July 7 - Pay $3000 toward lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, last month's rent was required at time of lease agreement. Lease period is effective July 1^st 2014 through June 30^th, 2015.

July 10 - Pay $375 to the county for a business license.

July 11 - Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment-use misc. exp.).

July 13 - You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $5,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life.

July 13 - Pay $200 for business cards/flyers/posters/ads to use for advertising.

July 14 - Pay $300 for miscellaneous (use misc. supplies).

July 15 - Hire part-time helper to be paid $12 per hour. Pay periods are the 1^stthrough the 15^th and 16^th through the end of the month with paydays being the 20^thfor the first pay period and the 5^th of the following month for the second pay period. (No entry required on this date; for informational purposes only)

July 30- Received telephone bill for July in amount of $45. Payment is due on August 10^th

July 31 - Pay $1,200 for a 12-month insurance policy. Policy effective dates August 1, 2014 through July 31^st, 2015

July 31- Accrue wages earned for employee for period of 16^th through 31st of July

(Wage calculations table is provided for you, below)

Total July bakery sales were $15,000. $5000 of these sales on accounts receivable

August 5- paid employee for period ending 7/31

August 8-Receive payments from customers towards accounts receivable in amount of $3200.

August 10 - paid July telephone bill

August 15- Purchase additional baking supplies in amount of $5000 from vendor, on account.

August 15 - Accrue wages earned for employee from period of 1^st through 15^th of August

(Wage calculations table provided below)

August 15-Pay rent on bakery space $1500

August 18-Receive payments from customers towards accounts receivable in amount of $1000

August 20- paid $8500 toward baking supplies vendor payable

August 20- pay employee for period ending 8/15

August 22- $300 in misc. supplies purchased

August 31- received telephone bill for August in amount of $45. Payment is due on September 10^th.

August 31- Accrue wages earned for employee for period of August 16^th through August 31^st

(Wage calculations table provided below)

August bakery sales total $20,000. $7,500 of this total on accounts receivable

September 1- paid dividends to self in amount of $3000

September 5-pay employee for period ending 8/31

September 7-Purchase merchandise for resale. See inventory valuation tab for details.

September 8- Receive payments from customers toward accounts receivable in amount of

$4000

September 10- pay August telephone bill

September 11-purchase baking supplies in amount of $ 7,000 from vendor on account.

September 13- Paid on supplies vendor account in amount of $5000

September 15- Accrue employee wages for period of September 1^st through September 15^th

September 15- Pay rent on bakery space $1500

September 15-Record merchandise sales transaction. See inventory valuation tab for details.

September 15-Record impact of sales transaction on COGS and the inventory asset.