FootCovers, Inc., with headquarters in Beaverton, Oregon, is one of the world’s leading manufacturers of athletic shoes and sports apparel. The following activities occurred during a recent year. The amounts are rounded to millions.
- Purchased additional buildings for $176 and equipment for $250; paid $408 in cash and signed a long-term note for the rest.
- Issued 100 shares of $2 par value common stock for $350 cash.
- Declared $145 in dividends to be paid in the following year.
- Purchased additional short-term investments for $7,616 cash.
- Several FootCovers investors sold their own stock to other investors on the stock exchange for $84.
- Sold $4,213 in short-term investments for $4,213 in cash.
| Transaction | General Journal | Debit | Credit |
| 1 | Buildings | 176 | |
| Equipment | 250 | ||
| Cash | 408 | ||
| Notes payable | 18 | ||
| (to record the purchase) | |||
| 2 | Cash | 350 | |
| Common stock | 200 | ||
| Additional paid-in capital | 150 | ||
| (to record the issue of shares purchase) | |||
| 3 | Retained earnings | 145 | |
| Dividends payable | 145 | ||
| (to record the declaration od devidend) | |||
| 4 | Short-term investments | 7616 | |
| Cash | 7616 | ||
| 5 | No journal entry required | ||
| 6 | Cash | 4213 | |
| Short-term investments | 4213 |
