Transactions for Tom Petty Company for the Month of October

question 72

Essay

Transactions for Tom Petty Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations.
1. Invested $40,000 cash in the business in exchange for stock.
2. Purchased land costing $28,000 for cash.
3. Purchased equipment costing $15,000 for $3,000 cash and the remainder on credit.
4. Purchased supplies on account for $800.
5. Paid $1,000 for a one-year insurance policy.
6. Received $3,000 cash for services performed.
7. Received $4,000 for services previously performed on account.
8. Paid wages to employees for $2,500.
9. Paid dividends of $2,000.

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Definitions:

Writing Off

The process of recognizing that an asset has lost value or a debt is uncollectible and reflecting this in the accounting records.

Bad Debt

Money owed to a company that is unlikely to be paid by the debtor, often leading to a financial loss for the company.

Receivables Balance

The total amount of money owed to a company by its customers for goods or services delivered on credit.

Depreciation

Depreciation is the accounting process of allocating the cost of tangible assets over their useful lives, representing how assets lose value over time.