Question

Following are the transactions of Green Company. May 1 The company billed a customer $3,400 in consulting revenue for sustainable proposals. 3 The company purchased $1,000 of energy-efficient supplies on credit. 9 The company collected $2,400 cash as partial payment of the May 1 consulting revenue. 20 The company paid $1,000 cash toward the payable for energy-efficient supplies. 31 The company paid $800 cash for May’s renewable energy utilities. Prepare general journal entries for the above transactions.

Answer 1

Answer:

Accounts Receivable 3,400

    Consulting Revenue 3,400

Supplies   1,000

    Accounts Payable   1,000

Cash     2,400

   Accounts Receivable 2,400

Accounts Payable  1,000

   Cash                           1,000

Utilities expense   800

  Cash                               800

Explanation:

The services are earned and were only billed not collected. So the company should reocgnize the receivable

The purchase of supplies is con credit, the company will recognize a liability

When the company collects from the account, it will decrease and cash will increase

When paying the supplier, their cash decrease and the liability is write-off

The utilities expense are cost of the period, so are recognize as expense.