2. Create General Ledger Entries based on the following Transactions for Nert Tech, a startup IT company:
Required: Please choose from the Transactions and Account Descriptions below to book the entries. If there is no entry for either a debit or credit, please leave it blank. Account Descriptions can be used multiple times.
1. Initial Investment of $500,000 Cash (No Common Stock Issued)
2. Purchase Land & Building for $175,000 Cash. Fair Value of Land $25,000, FV Building was $200,000
3. Purchased Inventory from a vendor $8,000 ($3,000 on Credit, $5,000 Cash)
4. Obtained a Bank Loan for $250,000
5. Prepaid for Advertising $5,000.
6. Sold Inventory costing $3,000 for $9,000 ($7,000 Cash, $2,000 on Account)
7. Accrued $2,000 in Wages earned but not paid
8. Paid $3,000 of Inventory purchased on Credit in #3 above
9. Paid $2,000 in Wages to employee
10. Reserved for Bad Debt Expense in the amount of $100
11. Accrued one month of Property Tax (Annual Estimate of $6,000)
12. One month Depreciation of Building (40 Year Asset)
Account Description Choices:
- Bad Debt Expense / Inventory Reserve for Bad Debt
- Building
- Land
- Sales Revenue
- Cash
- Long Term Debt
- Wage Expense
- Pre-Paid Expenses
- COGS (Cost of Goods Sold)
- Property Tax Accrual
- Depreciation Expense
- Property Tax Expense
- A/P (Accounts Payable)
- Accounts Receivable
- Accrued Wages
- Accumulated Depreciation
- Advertising Expense
- APIC (Additional Paid-In Capital)
Account Description DR CR
Cash 500,000
Land 25,000
Building 200,000
Inventory 8,000
Accounts Payable 3,000
Cash 5,000
Long Term Debt 250,000
Pre-Paid Expenses 5,000
Cash 7,000
Accounts Receivable 2,000
Wage Expense 2,000
Bad Debt Expense 100
Property Tax Accrual 500
Advertising Expense 5,000
Cash 3,000
Accumulated Depreciation 500
Property Tax Expense 500
