Sweet Dreams Chocolatiers Ltd. began operations on January 1, 2020. During its first year, the following transactions occurred:

1. Issued common shares for $200,000 cash.

2. Purchased $483,000 of inventory on account.

3. Sold inventory on account for $675,000. The original cost of the inventory that was sold was $405,000.

4. Collected $562,000 from customers on account.

5. Paid $431,000 to suppliers for the inventory previously purchased on account.

6. Bought a delivery vehicle for $39,000 cash.

7. Paid $27,300 for rent, including $2,100 related to the next year.

8. Incurred $20,000 of operating expenses, of which $18,000 was paid.

9. Recorded $2,000 of depreciation on the vehicle.

10. Declared and paid dividends of $8,500.

Requireda. Prepare journal entries to record each of the above transactions. b. Create T accounts and post the journal entries to the T accounts.

Question

Business

Logan Valenzuela

24 March, 01:59

Sweet Dreams Chocolatiers Ltd. began operations on January 1, 2020. During its first year, the following transactions occurred:

1. Issued common shares for $200,000 cash.

2. Purchased $483,000 of inventory on account.

3. Sold inventory on account for $675,000. The original cost of the inventory that was sold was $405,000.

4. Collected $562,000 from customers on account.

5. Paid $431,000 to suppliers for the inventory previously purchased on account.

6. Bought a delivery vehicle for $39,000 cash.

7. Paid $27,300 for rent, including $2,100 related to the next year.

8. Incurred $20,000 of operating expenses, of which $18,000 was paid.

9. Recorded $2,000 of depreciation on the vehicle.

10. Declared and paid dividends of $8,500.

Requireda. Prepare journal entries to record each of the above transactions. b. Create T accounts and post the journal entries to the T accounts.

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Answers (1)

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Nigel Friedman · Answer 1

Journal entry is a record of transaction in their respective accounts using the debit and credit system. Debit entry represents an increase and credit a decrease.

S / NO Particulars Debit Credit

1 Cash 200,000

Share stock 200,000

2 Inventory 483,000

Account payable 483,000

3. Account receivable 675,000

Sales 675,000

Cost of goods 405,000

Inventory 405,000

4 Cash 562,000

Account receivable 562,000

5 Account payable 431,000

Cash 431,000

6 Motor Vehicle 39,000

Cash 39,000

7 Rent 25200

Prepaid rent 2100

Cash 27300

8 Operating Expenses 20,000

Cash 18,000

Operating exp payable 2,000

9 Depreciation 2,000

Motor Vehicle 2,000

10 Dividends payable 8500

Cash 8500