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Q1TIAT_2

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Horngren'S Financial And Managerial Accounting
Found in: Page 116

Short Answer

Before you begin this assignment, review the Tying It All Together feature in the chapter. Part of the Fry’s Electronics, Inc.’s experience involves providing technical support to its customers. This includes in-home installations of electronics and also computer support at their retail store locations.

Requirements

2. Assume Fry’s Electronics, Inc.’s Modesto, California, location received $24,000 for an annual contract to provide computer support to the local city government. How would Fry’s Electronics record this transaction? What financial statement(s) would this transaction affect?

The business transaction is recorded and the financial statements affected will be the balance sheet.

See the step by step solution

Step by Step Solution

Step 1: Recording the transaction

Journal Entries

Date

Particulars

Debit ($)

Credit ($)

Cash

$24,000

Unearned Revenue

$24,000

Step 2: Financial Statement affected by the transaction

The major financial statement which is directly affected by this transaction will be as follows:

Balance Sheet: The cash received will increase the assets side of the balance sheet. The unearned revenue will increase the liabilities of the business.

Most popular questions for Business-studies Textbooks

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions:

Cash 11,000

Office Supplies 400

Accounts Receivable 16,500

Land 30,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 52,300

Dividends 0

Rent Expense 800

Salaries Expense 5,600

Service Revenue 8,200

Total Balance $ 64,300 64,300

During April, the business completed the following transactions:

Apr. 4 Collected $2,500 cash from a client on account.

8 Performed tax services for a client on account, $5,400.

13 Paid $3,000 on account.

14 Purchased furniture on account, $3,600.

15 Merry contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of $9,500.

18 Purchased office supplies on account, $900.

19 Received $2,700 for tax services performed on April 8.

20 Paid cash dividends of $6,500.

21 Received $5,700 cash for consulting work completed.

24 Received $2,400 cash for accounting services to be completed next month.

27 Paid office rent, $600.

28 Paid employee salary, $1,700.

Requirements

  1. Record the April transactions in the journal. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Furniture; Automobile; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; and Rent Expense. Include an explanation for each entry
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