Required:

Using the Chart of Accounts Provided, Indicate by |

question 124

Essay

$$\begin{array} { | l | l | l | l | } \hline 1100 & \text { Cash } & 2170 & \text { Property taxes payable } \\\hline 1120 & \text { Short-term investments } & 2180 & \text { Rent payable } \\\hline 1130 & \text { Notes receivable } & 2200 & \text { Long-term notes payable } \\\hline 1140 & \text { Accounts receivable } & 3100 & \text { Common stock } \\\hline 1145 & \text { Loan receivable } & 3200 & \text { Retained earnings } \\\hline 1150 & \text { Interest receivable } & 5000 & \text { Sales revenue } \\\hline 1160 & \text { Other accrued receivables } & 5300 & \text { Interest revenue } \\\hline 1200 & \text { Inventory } & 6000 & \text { Cost of goods sold } \\\hline 1250 & \text { Supplies } & 6200 & \text { Advertising expense } \\\hline 1260 & \text { Prepaid expenses } & 6210 & \text { Miscellaneous expense } \\\hline 1320 & \text { Buildings and equipment (B\&E) } & 6220 & \text { Depreciation expense } \\\hline 1325 & \text { Accumulated depreciation-B\&E } & 6230 & \text { Insurance expense } \\\hline 2110 & \text { Short-term notes payable } & 6240 & \text { Property tax expense } \\\hline 2120 & \text { Interest payable } & 6250 & \text { Rent expense } \\\hline 2130 & \text { Accounts payable } & 6260 & \text { Supplies expense } \\\hline 2140 & \text { Deferred revenue } & 6270 & \text { Salaries and wages expense } \\\hline 2150 & \text { Salaries and wages payable } & 6400 & \text { Interest expense } \\\hline 2160 & \text { Dividends payable } & 6999 & \text { Income summary account } \\\hline\end{array}$$
Required:

Using the chart of accounts provided, indicate by account number the account or accounts that would be debited and credited in the following transactions. Also enter the number 1, 2, or 3 to indicate the type of transaction as: (1) an external transaction, (2) an internal transaction recorded as an adjusting journal entry, or (3) a closing entry. The company uses a perpetual inventory system. All prepayments are initially recorded in permanent accounts

-Purchased building and equipment for $10,000,000, paying 20% cash and issuing a 30-year note for the balance.

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Definitions:

Black Markets

Illegal trading of goods and services that occurs outside of officially sanctioned channels, often due to laws or regulations.

Price Controls

Legal restrictions on how high or low a market price may go.

Binding Price Ceiling

A government-imposed limit on the price of a good or service that is below the market equilibrium price, leading to shortages.

Hybrid Cars

Vehicles powered by a combination of an internal combustion engine and one or more electric motors, using less fuel and emitting fewer pollutants than traditional cars.