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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 38
Preparing Accrual Basis Journal Entries for Business Activities
An auto-body repair shop has been in business for 23 years. Prepare journal entries for the following transactions, which occurred during a recent month, and determine the auto-body shop's preliminary net income.
a. Signed a long-term note and received a $150,000 loan from a local bank.
b. Billed a customer $2,000 for repair services just completed. Payment is expected in 45 days.
c. Wrote a check for $600 of rent for the current month.
d. Received $450 cash from a customer for work done the same day.
e. The company incurred $400 in advertising costs for the current month and is planning to pay these costs next month.
An auto-body repair shop has been in business for 23 years. Prepare journal entries for the following transactions, which occurred during a recent month, and determine the auto-body shop's preliminary net income.
a. Signed a long-term note and received a $150,000 loan from a local bank.
b. Billed a customer $2,000 for repair services just completed. Payment is expected in 45 days.
c. Wrote a check for $600 of rent for the current month.
d. Received $450 cash from a customer for work done the same day.
e. The company incurred $400 in advertising costs for the current month and is planning to pay these costs next month.
Explanation
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Accrual basis: This is a basis of accoun...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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