Assume you are interviewing for a part-time accounting job at Spilker & Associates, Inc., and the interviewer gives you the following list of company transactions in September 2012.
Sept. 1 Received $150,000 for capital stock issued.
2 Paid $20,000 cash to employees for wages earned in September 2012.
4 Purchased $75,000 of running shoes and clothing on account for resale.
5 Paid utilities of $1,800 for September 2012.
9 Paid $1,500 cash for September’s insurance premium.
11 Sold inventory of running shoes and clothing costing $35,000 for $70,000, with $20,000 received in cash and the remaining balance on credit.
15 Purchased $2,500 of supplies on account.
21 Received $25,000 from customers as payments on their accounts.
25 Paid $75,000 of accounts payable.
Using this list, you have been asked to do the following in the interview:
Required:
1. Journalize each of the transactions for September. (Omit explanations.)
2. Set up T-accounts, and post each of the journal entries made in (1).
3. Interpretive Question: If the business owners wanted to know at any given time how much cash the company had, where would you tell the owners to look? Why?