BUS 503 Advanced Accounting

Exercise 1

ABC Corporation has the following financial activities. Record the relevant journal entries:

1. Cash is deposited to the bank account.

Banks
Cash
2. Salaries of employees are accrued.
Salaries and Wages
Salaries and Wages Payable
3. Salaries of employees are payed from the bank account.
Salaries and Wages Payable
Banks
4. Bank loan is taken and the money is deposited to the bank account.
Banks
Bank Loans
5. A building is bought with cash.
Buildings
Cash
6. A car will be bought for the marketing department. It is agreed with a dealer on the
purchase price.
No entry. This sale is not yet recognized.
7. Goods are sold to a customer who has a credit account.
Accounts Receivable
Sales
Cost of Goods Sold
Inventory
8. The customer gives a note to cover his credit account.
Notes Receivable
Accounts Receivable
9. Raw materials, which will be used in production, are purchased in cash.
Inventory
Cash
10. Trade goods are purchased in cash.
Inventory
Cash
11. Equipment is bought on credit.
Equipment
Accounts Payable
12. The bank loan and the interest expense payed from the bank account.
Bank Loans
Interest Expense
Banks
13. Equipment is bought and a note is given to the supplier.
Equipment
Notes Payable
14. Taxes are payed in cash.
Taxes Payable
Cash
Exercise 2

ABC Corporation has the following financial activities. Record the relevant journal entries:

1. The corporation is founded for TL 200.000.

Cash 200.000
Capital Stock 200.000
2. Traded goods are purchased in cash for TL 90.000.
Inventory 90.000
Cash 90.000
3. Equipment is bought for TL 25.000 and paid in cash.
Equipment 25.000
Cash 25.000
4. TL 60.000 is deposited to the bank account.
Banks 60.000
Cash 60.000
5. Traded goods are sold in cash for TL 35.000 TL. TL 22.000 was paid for these goods
when they were purchased.
Cash 35.000
Sales 35.000
Cost of Goods Sold 22.000
Inventory 22.000
6. TL 20.000 worth of traded goods is sold to a customer on credit. According to the
books, the cost of these goods was TL 12.000.
Accounts Receivable 20.000
Sales 20.000
Cost of Goods Sold 12.000
Inventory 12.000
7. Traded goods are bought on credit for TL 25.000.
Inventory 25.000
Accounts Payable 25.000
8. Total amount of salaries is TL 10.000. TL 1.500 from this amount is deducted as taxes
and the rest is transferred to the employee accounts from the bank account.
Salaries and Wages 10.000
Banks 8.500
Taxes Payable 1.500
9. Rent of the factory building is TL 5.000. %20 tax is deducted from this amount and
the rest is transferred to the landlord’s account.
Administrative Expense 5.000
Banks 4.000
Taxes Payable 1.000
10. The company buys raw materials and gives a note to the supplier for TL 5.000.
Inventory 5.000
Notes Payable 5.000