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18 May, 07:06

Issued common stock to investors for $14,083 cash (example).

b. Purchased $878,418 of additional inventory on account.

c. Borrowed $11,000.

d. Sold $1,409,068 of products to customers on account; cost of the products sold was $852,316.

e. Paid cash dividends of $22,737. F. Purchased for cash $19,397 in additional property, plant, and equipment. G. Incurred $386,540 in selling expenses, paying three-fourths in cash and owing the rest on account. H. Earned $370 interest on investments, receiving 90 percent in cash. I. Incurred $1,395 in interest expense to be paid at the beginning of next year.

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  1. 18 May, 07:41
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    1. Cash ... DR $14083

    To Common Stock ... $14083

    (Being Cash received from sale of common stock to shareholders)

    2. Merchandise Inventory ... DR $878418

    To Accounts Payable ... $878418

    (Being Inventory purchased on account)

    3. Cash ... DR $11000

    To Long Term Debt ... $11000

    (Being Cash Borrowed)

    4. Accounts Receivable ... DR $1409068

    To Sales ... $1409068

    (Being Sales made on Account)

    Cost of Goods Sold ... DR $852316

    To Merchandise Inventory ... $852316

    (Being Cost of goods sold recognised against sales made)

    Dividends Payable ... DR $ 22737

    To Cash ... $22737

    (Being Dividends Paid)

    Property, Plant and Equipment ... DR $19397

    To Cash ... $19397

    (Being additional Property, Plant and Equipment purchased in cash)

    Selling Expense ... DR $386540

    To Cash ... $ 289905

    To Accounts Payable ... $96635

    (Being Selling Expenses incurred in cash and on account)

    Cash ... DR $333

    Interest Recievable ... DR $37

    To Interest Income ... $ 370

    (Being Interest Received in Cash and partly receivable later)

    Interest Expense ... DR $1395

    To Interest Payable ... $1395

    (Being Interest Expense Accrued).
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