Determine the current value of your total investment. Do not make any changes to your investment at this time. Calculate your total based on the number of shares and the new price per share, for each company.

Running Head: JOURNAL ENTRIES

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JOURNAL ENTRIES

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Journal Entries

April 20, 2018

Journal Entries

In preparation of the Journal entries; I chose three companies with their actual current stock prices.

1. Apple Inc. starts with an initial capital of 15500 shares of common stock having $177.84 per share. In the first month of operations, the following transactions took place.

Date Transaction
Jan 2 Advance rent of $36000 was paid
Jan 3 Cash of $60000 was paid on purchasing an equipment costing $80000. The balance was taken as 1year payable with 9% interest rate
Jan 4 Office supplies costing $17600 were purchased
Jan 13 Received $28500 cash after offering services to customers
Jan 13 The accounts payable on the office supply on January 4 were paid
Jan 14 Employees’ wages for the first two weeks were paid costing $19100
Jan 18 $54100 worth services were provided. $32900 was paid and the rest was promised later.
Jan 23 $15300 was received from the services that were rendered on Jan 18.
Jan 25 $4000 was received as an advance payment from customers
Jan 26 Office supplies costing $5200 were purchased
Jan 28 Wages of $19100 were paid to employees for the 3rd and 4th weeks of the month
Jan 31 $5000 were paid as dividends
Jan 31 Received electricity bill of $2470
Jan 31 $1494 telephone bill was received
Jan 31 Petty expenses paid during the month accounted to $3470

1. Microsoft Inc. starts with an initial capital of 8250 shares of common stock having $96.44 per share. In the first month of operations, the following transactions took place.

Date Transaction
Jan 2 Advance rent of $11880 was paid
Jan 3 Cash of $19800 was paid on purchasing an equipment costing $26400. The balance was taken as 1year payable with 2.97% interest rate
Jan 4 Office supplies costing $5808 were purchased
Jan 13 Received $9405 cash after offering services to customers
Jan 13 The accounts payable on the office supply on January 4 were paid
Jan 14 Employees’ wages for the first two weeks were paid costing $6303
Jan 18 $17853 worth services were provided. $10857 was paid and the rest was promised later.
Jan 23 $5049 was received from the services that were rendered on Jan 18.
Jan 25 $1320 was received as an advance payment from customers
Jan 26 Office supplies costing $1716 were purchased
Jan 28 Wages of $6303 were paid to employees for the 3rd and 4th weeks of the month
Jan 31 $1650 were paid as dividends
Jan 31 Received electricity bill of $815.10
Jan 31 $493.02 telephone bill was received
Jan 31 Petty expenses paid during the month accounted to $1145.10

1. General Electric Inc. starts with an initial capital of 15500 shares of common stock having $177.84 per share. In the first month of operations, the following transactions took place.

Date Transaction
Jan 2 Advance rent of $1800 was paid
Jan 3 Cash of $3000 was paid on purchasing an equipment costing $4000. The balance was taken as 1year payable with 0.45% interest rate
Jan 4 Office supplies costing $880 were purchased
Jan 13 Received $1425 cash after offering services to customers
Jan 13 The accounts payable on the office supply on January 4 were paid
Jan 14 Employees’ wages for the first two weeks were paid costing $955
Jan 18 $2705 worth services were provided. $1645 was paid and the rest was promised later.
Jan 23 $765 was received from the services that were rendered on Jan 18.
Jan 25 $200 was received as an advance payment from customers
Jan 26 Office supplies costing $260 were purchased
Jan 28 Wages of $955were paid to employees for the 3rd and 4th weeks of the month
Jan 31 $250 were paid as dividends
Jan 31 Received electricity bill of $123.50
Jan 31 $74.70 telephone bill was received
Jan 31 Petty expenses paid during the month accounted to $173.5

Out of the $25,000 that I had, I gave Apple Inc. 62% representing $15,500 of the amount, Microsoft Inc. got 33% representing $8250 of the amount and General Electric got 5% representing $1250 of the total amount. This allocation I made on the basis that the Company that got the higher percentage had the price per share also high. That is; $177.84, $96.44 and $13.66 respectively.

From the above analysis; here is a simplified illustration of how many shares I bought from each of the 3 companies.

Apple Inc. = $15500/$177.84 = 87.16 shares but decided to buy 87 shares since I cannot buy part of share.

Microsoft Inc. = $8250/$96.44 = 82.96 shares but I decided to buy 83 shares since I cannot buy a part of a share.

General Electric Inc. = $1250/$13.66 = 91.50 shares but I decided to buy 91 shares since I cannot buy part of a share.

References

Jeff D. 2015, August 20, biggest public companies in the United States of America, https://www.visualcapitalist.com

Journal entries, https://www.accountingexplained.com

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