Question

Provide JOURNAL ENTRIES FOR THE FOLLOWING

	($ million)		CASH	Non Cash	TOTAL
			NO CASH FLOW
1	Inventory Purchases		0	250	250
			Cash Purchase	Credit Purchase
			NO CASH FLOW
2	2019 Sales consisted of		0	1,000	1,000
			Cash Sales	Credit Sales
			NO CASH FLOW
3	2019 Cost of Sales		n/a	600	600
4	General Expenses		cash outflows	additional accrued	TOTAL EXPENSE
				liabilities
		Salaries	100	0	100
		Utility Bills	50	50	100
	***	Depreciation	0	100	100
		TOTAL	150	150	300
			CASH OUTFLOW	ACCRUED
				LIABILITY	TOTAL EXPENSE
5	Interest Expenses		50	10	60
	Total interest was 60.
			CASH OUTFLOW	ACCRUED
				LIABILITY	TOTAL EXPENSE
6	Taxes (assumed and fixed)		50	50	100
	Total Tax expense was 100

Answer 1

Journal Entries :

1 ) purchases. A/c. -Dr 250$

To Creditors payable A/c. 250$

( Being purchases made on credit )

2 ). Accounts Receivable. A/c. - Dr 1000$

To sales. A/c. 1000$

( Being sales made on credit )

3 ). Cost of sales A/c. -Dr. 600$

To Inventory A/c. 600$

( Being cost of goods sold adj with inventory )

4 ). Salaries A/c. -Dr. 100$

To Cash A/c 100$

( Being Salaries paid )

Utility bills. A/c. -Dr. 100$

To Cash. A/c. 50$

To Bills payable A/c. 50$

( Being bills paid and accrued accounted )

Depreciation. A/c. -Dr. 100$

To Asset. A/c. 100$

( Being depreciation provided for )

5 ). Interest Expenses. A/c. -Dr. 60$

To Cash. A/c. 50$

To Interest Payable A/c. 10$

( Being Interest paid and payable created )

6) Taxes. A/c. - Dr. 100$

To Cash. A/c. 50$

To tax payable A/c. 50$

( Being tax paid and payable for the period ).