Group 4 Problem P31 Tony Phan Liliana Doonan Julee Maidenberg Erik Peterson Shawn Croll

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Group 4Problem P3-1Tony PhanLiliana
DoonanJulee Maidenberg Erik Peterson Shawn
Croll
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Choudhury Corporation

• Example Purchased equipment for use in the
  business paid one-third cash and signed a note
  payable for the balance
• Debit Equipment Credit Cash, Note payable

• B. Issued stock to new investors.
• Debit Cash Credit Contributed Capital

C. Paid cash for salaries and wages. Debit
Operating expenses Credit Cash
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D. Collected cash for services performed this
period. Debit Cash Credit Service revenue

• E. Collected cash on accounts receivable for
  services performed last period.
• Debit Cash
• Credit Accounts receivable

• Performed services this period on credit.
• Debit Accounts receivable
• Credit Service revenue

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• Paid operating expenses incurred this period.
• Debit Operating expenses
• Credit cash

• Paid cash on accounts payable for expenses
  incurred last period.
• Debit Accounts payable Credit cash

I. Incurred operating expenses this period to
be paid next period. Debit Operating
expenses Credit Accounts payable
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• Purchased supplies to be used later paid cash
• Debit Supplies on Hand Credit Cash

• K. Used some of the supplies on hand for
  operation.
• Debit Operating expenses
• Credit Supplies on Hand

• Purchased a patent (an intangible asset) paid
  cash.
• Debit Patents Credit Cash

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M. Made a payment on the equipment note in (a)
the payment was part principal and part interest
expense. Debit Note payable, interest expense
Credit cash

• N. Paid three-fourths of the income tax expense
  for the year. The balance will be paid next year.
• Debit Income tax expense Credit income taxes
  payable, cash

• On the last day of the current period, paid cash
  for an insurance policy covering the next two
  years.
• Debit Prepaid expenses Credit Cash