{"id":35442,"date":"2024-02-29T08:19:09","date_gmt":"2024-02-29T08:19:09","guid":{"rendered":"https:\/\/www.goodacademic.com\/blog\/questions\/reconstruct-the-correct-entries-under-accrual-accounting-principles-and-post-the-effects-to-t-accounts\/"},"modified":"2024-02-29T08:19:09","modified_gmt":"2024-02-29T08:19:09","slug":"reconstruct-the-correct-entries-under-accrual-accounting-principles-and-post-the-effects-to-t-accounts","status":"publish","type":"questions","link":"https:\/\/www.goodacademic.com\/blog\/questions\/reconstruct-the-correct-entries-under-accrual-accounting-principles-and-post-the-effects-to-t-accounts\/","title":{"rendered":"Reconstruct the correct entries under accrual accounting principles and post the effects to T accounts"},"content":{"rendered":"<p>Reconstruct the correct entries under accrual accounting principles and post the effects to T accounts\n<\/p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Budi started a small boat repair service company during the &nbsp;&nbsp;current year. He is interested in obtaining a $100,000 loan from your bank to &nbsp;&nbsp;build a dry dock to store boats for customers. At the end of the year, he &nbsp;&nbsp;prepared the following statements based on information stored in a large &nbsp;&nbsp;filing cabinet &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BUDI COMPANY<br \/>\n&nbsp;&nbsp;&nbsp;&nbsp;Profit for the Current Year &nbsp;&nbsp;Service fees collected in cash during &nbsp;&nbsp;the current year 55 &nbsp;&nbsp;&nbsp;&nbsp;Cash dividends received 10000 &nbsp;&nbsp;&nbsp;&nbsp;Total 65000 &nbsp;&nbsp;&nbsp;&nbsp;Expense for operations paid during the &nbsp;&nbsp;current year 22 &nbsp;&nbsp;&nbsp;&nbsp;Cash stolen 500 &nbsp;&nbsp;&nbsp;&nbsp;New tools purchased during the current &nbsp;&nbsp;year (cash paid) 1000 &nbsp;&nbsp;&nbsp;&nbsp;Supplies purchased for use on service &nbsp;&nbsp;jobs (cash paid) 3200 &nbsp;&nbsp;&nbsp;&nbsp;Total 26700 &nbsp;&nbsp;&nbsp;&nbsp;Profit 38300 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BUDI &nbsp;&nbsp;COMPANY<br \/>\n&nbsp;&nbsp;&nbsp;&nbsp;Assets Owned at the End of the Current Year &nbsp;&nbsp;&nbsp;&nbsp;Cash in checking account 29300 &nbsp;&nbsp;&nbsp;&nbsp;Building (at current market value) 32000 &nbsp;&nbsp;&nbsp;&nbsp;Tools and equipment 18000 &nbsp;&nbsp;&nbsp;&nbsp;Land (at current market value) 30000 &nbsp;&nbsp;&nbsp;&nbsp;Stock in ABC Industrial 130000 &nbsp;&nbsp;&nbsp;&nbsp;Total 239300 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of completed &nbsp;&nbsp;transactions: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Received the following contributions (at fair value) to the &nbsp;&nbsp;business from the owner when it was started in exchange for 1,000 shares of &nbsp;&nbsp;$1 par value common stock in the new company: &nbsp;&nbsp;&nbsp;&nbsp;Building &nbsp;&nbsp;21000 Land 20000 &nbsp;&nbsp;&nbsp;&nbsp;Tools &nbsp;&nbsp;and equipment 17000 Cash 1000 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Earned service fees during the current year of 87000; of the &nbsp;&nbsp;cash collected 20000 was for deposits from customers on work to be done by &nbsp;&nbsp;Budi in the next year. &nbsp;&nbsp;&nbsp;&nbsp;c. We received the cash dividends on shares of ABC Industrial &nbsp;&nbsp;stock purchased by Budi six years earlier (the stock was not owned by the &nbsp;&nbsp;company). &nbsp;&nbsp;&nbsp;&nbsp;d. &nbsp;&nbsp;He incurred operating expenses during the current year of 61000 &nbsp;&nbsp;&nbsp;&nbsp;e. &nbsp;&nbsp;Determined amount of supplies on hand (unused) at the end of the current year &nbsp;&nbsp;as 700 &nbsp;&nbsp;&nbsp;&nbsp;f. &nbsp;&nbsp;A temporary employee subsequently fired, stole 500 cash from the business. &nbsp;&nbsp;There was no insurance coverage for theft &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. We have purchased tools and equipment during the year &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Reconstruct the correct entries under accrual accounting principles and post the effects to T accounts &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Budi started a small boat repair service company during the &nbsp;&nbsp;current year. He is interested in obtaining a $100,000 loan from your bank to &nbsp;&nbsp;build a dry dock to store boats for customers. At the end of the year, he [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"disciplines":[183],"paper_types":[],"tagged":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/35442"}],"collection":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions"}],"about":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/types\/questions"}],"author":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/comments?post=35442"}],"version-history":[{"count":0,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/35442\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/media?parent=35442"}],"wp:term":[{"taxonomy":"disciplines","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/disciplines?post=35442"},{"taxonomy":"paper_types","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/paper_types?post=35442"},{"taxonomy":"tagged","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/tagged?post=35442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}