Journalize and Post Basic Transactions

question 44

Essay

Journalize and post basic transactions
Precision Grading Co. was organized to grade construction sites.
* On June 1, owner Dave Precision deposited $90,000 in a new bank account opened in the name of the business in exchange for stock.
* On June 3, the company acquired grading equipment costing $89,000, paying $43,000 cash and signing a note payable for the balance.
* On June 10, the company paid $13,000 of the amount owed for equipment acquired on June 3.
Instructions: Journalize these three transactions and post to the ledger accounts.

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Definitions:

Human Interaction

The communication and exchange between individuals, including verbal and non-verbal behaviors, essential in social and business contexts.

Profitability Index

A ratio that calculates the relationship between the present value of future cash flows and the initial investment, used to assess project desirability.

Average Accounting Return

The average annual net income of an investment divided by the average book value of the investment.

Cost of Capital

The required return necessary to make a capital budgeting project, such as building a new plant, worthwhile, including the cost of debt and equity financing.