Driftwood shipbuilders entered into the following transaction during 2012: 1. Sold $6,000 of no-par common stock. 2.

Question:

Driftwood shipbuilders entered into the following transaction during 2012:

1. Sold $6,000 of no-par common stock.

2. Purchased $6,000 of inventory on account.

3. Purchased new equipment for $5,000 in cash.

4. Collections on accounts receivable totaled $10,000.

5. Made payments of $5,000 to suppliers.

6. Declared and paid dividends of $2,000.

7. Paid rent of $6,000 for the last six month of 2011 and $6,000 for the first six months of 2012.

8. Made sales totaling $100,000: $35000 on account and the remainder for cash.

9. Paid $40,000 in cash for miscellaneous expenses.

10. Sold investments with a cost of $20,000 for $25,000.

(a) Prepare journal entries for each transaction.

(b) Prepare a cash T-account and post all transactions affecting cash to the account. Assume a beginning cash balance of $25,000.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...