Details of this Paper

"After researching the different forms of business...

Description

Solution


Question

"After researching the different forms of business organization, Natalie Koebel decides to operate ?Cookie Creations? as a proprietorship. She then starts the process of getting the business running. In November 2009, the following activities take place. November Transactions Nov. 8 Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account. 8 She opens a bank account under the name ?Cookie Creations? and transfers $500 from her personal account to the new account. 11 Natalie pays $165 to have advertising brochures and posters printed. She plans to distribute these as opportunities arise. (Hint: Use Advertising Supplies.) 13 She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. 14 Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer that originally cost her $750. Natalie decides to start using it only in her new business. She estimates that the equipment is currently worth $300. She invests the equipment in the business. 16 Natalie realizes that her initial cash investment is not enough. Her grandmother lends her $2,000 cash, for which Natalie signs a note payable in the name of the business. Natalie deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months.As a result,the note payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.) 17 She buys more baking equipment for $900 cash. 20 She teaches her first class and collects $125 cash. 25 Natalie books a second class for December 4 for $150. She receives $30 cash in advance as a down payment. 30 Natalie pays $1,320 for a one-year insurance policy that will expire on December 1, 2010. Instructions (a) Use the journal template provided and prepare journal entries to record the November transactions. Remember to use correct journal entry formatting. (b) Post the journal entries to general ledger accounts. Remember to use correct posting references. Also, note that we do not use descriptions in the ledger account "description" column for regular journal entry postings. (c) Prepare a trial balance at November 30. Be sure to total the columns of your trial balance. Do NOT include accounts that do not have a ledger balance. (d) Submit your completed CCC2 file to the dropbox for grading and feedback. (e) Make noted corrections before beginning CCC3. Chapter 3 - CCC3 Open your corrected CCC2 file. Complete the required CCC3 activities. Note: For transaction 3, round depreciation to the nearest dollar. It is the end of November and Natalie has been in touch with her grandmother. Her grandmother asked Natalie how well things went in her first month of business. Natalie, too, would like to know if she has been profitable or not during November. Natalie realizes that in order to determine Cookie Creations? income, she must first make adjustments. Natalie puts together the following additional information. 1. A count reveals that $60 of brochures and posters remain at the end of November. 2. A count reveals that $35 of baking supplies were used during November. 3. Natalie estimates that all of her baking equipment will have a useful life of 5 years or 60 months. (Assume Natalie decides to record a full month?s worth of depreciation, regardless of when the equipment was obtained by the business.) 4. Natalie?s grandmother has decided to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (Assume that half a month of interest accrued during November.) 5. On November 30, a friend of Natalie?s asks her to teach a class at the neighborhood school. Natalie agrees and teaches a group of 35 first-grade students how to make Santa Claus cookies. The next day, Natalie prepares an invoice for $300 and leaves it with the school prin?cipal. The principal says that he will pass the invoice along to the head office, and it will be paid sometime in December. 6. Natalie receives a cellphone bill for $45. She uses her cellphone only for business. The bill is for services provided during November and is due December 15. Instructions Using the information that you have gathered through Chapter 2, and based on the new infor?mation above, do the following. (a) Prepare and post the adjusting journal entries using the general journal template provided. Again, remember to use correct formatting in both the journal and the ledger. (b) Prepare an adjusted trial balance using the correct worksheet in your template workbook. Be sure to total the columns of your ATB and include only those accounts that have a balance. (c) Using the adjusted trial balance, calculate Cookie Creations? net income or net loss for the month of November. You are not required to prepare an income statement. (d) Submit the file to the dropbox for grading and feedfback. (e) Review the feedback provided and make necessary corrections before moving on to CCC4. Chapter 4 - CCC4 Open your corrected CCC3 file. Complete the required activities for CCC4. Note that this is a rather difficult problem. You are asked to prepare financial statements and prepare and post closing entries, but you were not given the specific transactions for December. Instead, you are given the Adjusted Trial Balance for Dec. 31. I recommend that you take the balances on the ATB and write them in the correct ledger accounts. Just make a note to yourself in each ledger that this is the "Dec. 31 balance." Of course, if we were REALLY doing a set of books, we would have posted the entries for Dec. and this wouldn't be necessary. Natalie had a very busy December.At the end of the month,after journalizing and post?ing the December transactions and adjusting entries. Natalie prepared the following adjusted trial balance. COOKIE CREATIONS Adjusted Trial Balance December 31, 2009 Debit Credit Cash $1,180 Accounts Receivable 875 Baking Supplies 350 Prepaid Insurance 1,210 Baking Equipment 1,200 Accumulated Depreciation - Baking Equipment $ 40 Accounts Payable 75 Salaries Payable 56 Interest Payable 15 Unearned Revenue 300 Notes Payable 2,000 N. Koebel, Capital 800 N. Koebel, Drawing 500 Teaching Revenue 4,515 Salaries Expense 1,006 Telephone Expense 125 Advertising Supplies Expense 165 Baking Supplies Expense 1,025 Depreciation Expense 40 Insurance Expense 110 Interest Expense 15 $7,801 $7,801 Instructions: Using the information in the adjusted trial balance, do the following. (a) Prepare an income statement and a statement of owner?s equity for the 2 months ended December 31, 2009, and a classified balance sheet as at December 31, 2009. The note payable has a stated interest rate of 6%, and the principal and interest are due on November 16, 2011. (b) Natalie has decided that her year-end will be December 31, 2009. Prepare and post closing entries as of December 31, 2009. (c) Prepare a post-closing trial balance. (d) Submit your file to the dropbox for grading and feedback. (e) Make necessary corrections based on the feedback you receive before going on to CCC5. Chapter 5 - CCC5 Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European mixers. The owner of Kzinski Supply Co. has approached Natalie to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily identified. In the end, Natalie decides to use the perpetual inventory system to track her inventory. The following transactions happen during the month of January. Date Transaction Jan 4 Bought five deluxe mixers on account from Kzinski Supply Co. for $2,875, FOB shipping point, terms n/30. 6 Paid $100 freight on the January 4 purchase. 7 Returned one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues Cookie Creations credit for the cost of mixer plus $20 for the cost of freight that was paid on January 6 for one mixer 8 Collected $375 of the accounts receivable from December 2009. 12 Three deluxe mixers are sold on account for $3,450, FOB destination, terns n/30. (Cost of goods sold is $595 per mixer.) 14 Paid the $75 of delivery charges for the three mixers that were sold on January 12. 14 Bought four deluxe mixers on account from Kzinski Supply Co. for $2,300, FOB ship ping point, terms n/30. 17 Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an additional $1,000 cash in Cookie Creations. 18 Paid $80 freight on the January 14 purchase 20 Sold two deluxe mixers for $2,300 cash. (Cost of goods sold is $595 per mixer.) 28 Natalie issued a check to her assistant for all the help the assistant has given her during the month. Her assistant worked 20 hours in January and is also paid the $56 owed at December 31, 2009. (Natalie?s assistant earns $8 an hour.) 28 Collected the amounts due from customers for the January 12 transaction. 30 Paid a $145 cellphone bill ($75 for the December 2009 account payable and $70 for the month of January). (Recall that the cellphone is used only for business purposes.) 31 Paid Kzinski all amounts due. 31 Natalie withdrew $750 cash for personal use. As of January 31, the following adjusting entry data is available. 1. A count of baking supplies reveals that none were used in January. 2. Another month?s worth of depreciation needs to be recorded on the baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months and no salvage value.) 3. An additional month?s worth of interest on her grandmother?s loan needs to be accrued. (The interest rate is 6%.) 4. During the month, $110 of insurance has expired. 5. An analysis of the unearned revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result, there is no change to the unearned revenue account. Natalie hopes to complete the remaining lessons in February. 6. An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining. Instructions Using the information from previous chapters and the new information above, do the following. (a) Prepare and post the January 2010 transactions. (b) Prepare a trial balance. (c) Prepare and post the adjusting journal entries required. (d) Prepare an adjusted trial balance. (e) Prepare a multiple-step income statement for the month ended January 31, 2010. ",Are you still evaluatingn the assignment or have you started on it?

 

Paper#3142 | Written in 18-Jul-2015

Price : $25
SiteLock