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Guest
in terms of GAAP? Presented below are a number of business transactions that occurred during the current year for Fresh Horses, Inc.
1. The president of Fresh Horses, Inc. used his expense account to purchase a new Suburban solely for personal use. The following journal entry was made.
Miscellaneous Expense29,000
Cash 29,000
2. Merchandise inventory that cost $620,000 is reported on the balance sheet at $690,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value.
Merchandise Inventory70,000
Revenue 70,000
3. 6. Because of a “fire sale,” equipment obviously worth $200,000 was acquired at a cost of $155,000. The following entry was made.
Equipment200,000
Cash 155,000
Revenue 45,000
1. The president of Fresh Horses, Inc. used his expense account to purchase a new Suburban solely for personal use. The following journal entry was made.
Miscellaneous Expense29,000
Cash 29,000
2. Merchandise inventory that cost $620,000 is reported on the balance sheet at $690,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value.
Merchandise Inventory70,000
Revenue 70,000
3. 6. Because of a “fire sale,” equipment obviously worth $200,000 was acquired at a cost of $155,000. The following entry was made.
Equipment200,000
Cash 155,000
Revenue 45,000