McDonalds Corporation is a well-known fast-food restaurant company. Examine the accompanying balance sheet values, which are based

McDonald’s Corporation is a well-known fast-food restaurant company. Examine the accompanying balance sheet values, which are based on McDonald’s condensed quarterly report and actual terminology:

Consider the following assumed partial summary of transactions for October 2011 ($ in millions):
a. Revenues in cash, company-owned restaurants, $1,550.
b. Revenues, on open account from franchised restaurants, $550. Open a separate revenue account for these sales.
c. Inventories acquired on open account, $827.
d. Cost of the inventories sold, $820.
e. Depreciation, $250. (Debit Depreciation Expense.)
f. Paid rent and insurance premiums in cash in advance, $142. (Debit Prepaid Expenses.)
g. Prepaid expenses expired, $137. (Debit Operating Expenses.)
h. Paid other liabilities in cash, $163.
i. Cash collections on receivables, $590.
j. Cash disbursements on notes and accounts payable, $747.
k. Paid interest expense in cash, $110.
l. Paid other expenses in cash, mostly payroll and advertising, $1, 010. (Debit Operating Expenses.)

Required
1. Record the transactions in the journal.
2. Enter beginning balances in T-accounts. Post the journal entries to the T-accounts. Key your entries with the transaction letters used here.
3. Prepare a trial balance for the month ended October 31, 2011.

Transcribed Image Text:

McDonald's Corporation Balance Sheet Values, September 30, 2011 ($ in millions) Cash Accounts and notes receivable Inventories Prepaid expenses Property and equipment, at cost Other assets Accumulated depreciation Notes and accounts payable Other liabilities Paid-in capital Retained earnings Other stockholders' equity Total 2,389 1,204 115 714 35,220 5,518 $12,882 750 18,189 5,447 35,330 27,438 $72,598 $72,598