Accounting 115
Cookie Creations
Part 4
(a)
|GENERAL JOURNAL |J2 |
|Date |Account Titles and Explanation |Debit |Credit |
|Dec. |1 |No Journal Entry | | |
| | | | | |
| |4 |Cash |100 | |
| | | Teaching Revenue | |100 |
| | | | | |
| |8 |Cash |250 | |
| | | Accounts Receivable | |250 |
| | | | | |
| |10 |Cash |625 | |
| | | Unearned Revenue | |625 |
| | | | | |
| |15 |Accounts Payable |50 | |
| | | Cash | |50 |
| | | | | |
| |16 |Accounts Payable |600 | |
| | | Cash | |600 |
| | | | | |
| |18 |Cash |50 | |
| | | Unearned Revenue | |50 |
| | | | | |
| |24 |Cash |3,000 | |
| | |Accounts Receivable |500 | |
| | | Teaching Revenue | |3,500 |
| | | | | |
| |24 |Baking Supplies |1,250 | |
| | | Cash | |1,250 |
| | | | | |
| |24 |Salaries Expense |800 | |
| | | Cash | |800 |
| | | | | |
| |24 |Dividends Declared |500 | |
| | | Cash | |500 |
(a), (c) and (f)
| | | Cash | | | |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |305 |
|Dec. 4 | |J2 |100 | |405 |
|Dec. 8 | |J2 |250 | |655 |
|Dec. 10 | |J2 |625 | |1,280 |
|Dec. 15 | |J2 | |50 |1,230 |
|Dec. 16 | |J2 | |600 |630 |
|Dec. 18 | |J2 |50 | |680 |
|Dec. 24 | |J2 |3,000 | |3,680 |
|Dec. 24 | |J2 | |1,250 |2,430 |
|Dec. 24 | |J2 | |800 |1,630 |
|Dec. 24 | |J2 | |500 |1,130 |
| | | | | | |
|Accounts Receivable |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |250 |
|Dec. 8 | |J2 | |250 |0 |
|Dec. 24 | |J2 |500 | |500 |
|Dec. 31 | |J3 |375 | |875 |
| | | | | | |
|Advertising Supplies |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |75 |
|Dec. 31 |Adjusting |J3 | |25 |50 |
| | | | | | |
|Baking Supplies |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |100 |
|Dec. 24 | |J2 |1,250 | |1,350 |
|Dec. 31 |Adjusting |J3 | |1,000 |350 |
(a), (c) and (f) (Continued)
|Prepaid Insurance |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |1,200 |
|Dec. 31 |Adjusting |J3 | |100 |1,100 |
| | | | | | |
|Baking Equipment |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |1,200 |
| | | | | | |
|Accumulated Depreciation, Baking Equipment |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |20 |
|Dec. 31 |Adjusting |J3 | |20 |40 |
| | | | | | |
|Website |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( |600 | |600 |
| | | | | | |
|Accumulated Amortization, Website |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 31 |Adjusting |J3 | |25 |25 |
| | | | | | |
|Accounts Payable |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |650 |
|Dec. 15 | |J2 |50 | |600 |
|Dec. 16 | |J2 |600 | |0 |
|Dec. 31 |Adjusting |J3 | |75 |75 |
| | | | | | |
|Salaries Payable |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 31 |Adjusting |J3 | |56 |56 |
| | | | | | |
(a), (c) and (f) (Continued)
|Interest Payable |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |5 |
|Dec. 31 |Adjusting |J3 | |10 |15 |
| | | | | | |
|Unearned Revenue |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |25 |
|Dec. 10 | |J2 | |625 |650 |
|Dec. 18 | |J2 | |50 |700 |
|Dec. 31 |Adjusting |J3 |400 | |300 |
| | | | | | |
|Note Payable |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |2,000 |
| | | | | | |
|Retained Earnings |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 31 |Closing |J4 | |2,494 |2,494 |
|Dec. 31 |Closing |J4 |500 | |1,994 |
| | | | | | |
|Dividends |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 24 | |J2 |500 | |500 |
|Dec. 31 |Closing |J4 | |500 |0 |
| | | | | | |
|Income Summary |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 31 |Closing |J4 | |4,725 |4,725 |
|Dec. 31 |Closing |J4 |2,231 | |2,494 |
|Dec. 31 |Closing |J4 |2,494 | |0 |
| | | | | | |
|Common Stock |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |800 |
(a), (c) and (f) (Continued)
|Teaching Revenue |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |350 |
|Dec. 4 | |J2 | |100 |450 |
|Dec. 24 | |J2 | |3,500 |3,950 |
|Dec. 31 |Adjusting |J3 | |375 |4,325 |
|Dec. 31 |Adjusting |J3 | |400 |4,725 |
|Dec. 31 |Closing |J4 |4,725 | |0 |
| | | | | | |
|Salaries Expense |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 24 | |J2 |800 | |800 |
|Dec. 31 |Adjusting |J3 |56 | |856 |
|Dec. 31 |Closing |J4 | |856 |0 |
| | | | | | |
|Telephone Expense |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |50 |
|Dec. 31 |Adjusting |J3 |75 | |125 |
|Dec. 31 |Closing |J4 | |125 |0 |
| | | | | | |
|Advertising Supplies Expense |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |20 |
|Dec. 31 |Adjusting |J3 |25 | |45 |
|Dec. 31 |Closing |J4 | |45 |0 |
| | | | | | |
|Baking Supplies Expense |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |25 |
|Dec. 31 |Adjusting |J3 |1,000 | |1,025 |
|Dec. 31 |Closing |J4 | |1,025 |0 |
(a), (c) and (f) (Continued)
|Depreciation Expense, Baking Equipment |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |20 |
|Dec. 31 |Adjusting |J3 |20 | |40 |
|Dec. 31 |Closing |J4 | |40 |0 |
| | | | | | |
| |
|Amortization Expense, Website |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 31 |Adjusting |J3 |25 | |25 |
|Dec. 31 |Closing |J4 | |25 |0 |
| |
|Interest Expense |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Nov. 30 |Balance |( | | |5 |
|Dec. 31 |Adjusting |J3 |10 | |15 |
|Dec. 31 |Closing |J4 | |15 |0 |
| | | | | | |
| |
|Insurance Expense |
|Date |Explanation |Ref |Debit |Credit |Balance |
|Dec. 31 |Adjusting |J3 |100 | |100 |
|Dec. 31 |Closing |J4 | |100 |0 |
(b)
|COOKIE CREATIONS |
|Unadjusted Trial Balance |
|December 31, 2007 |
|Account |Debit |Credit |
|Cash |$1,130 | |
|Accounts receivable |500 | |
|Advertising supplies |75 | |
|Baking supplies |1,350 | |
|Prepaid insurance |1,200 | |
|Baking equipment |1,200 | |
|Accumulated depreciation—baking equipment | |$ 20 |
|Website |600 | |
|Accounts payable | |0 |
|Interest payable | |5 |
|Unearned revenue | |700 |
|Note payable | |2,000 |
|Common stock | |800 |
|Dividends |500 | |
|Teaching revenue | |3,950 |
|Salaries expense |800 | |
|Telephone expense |50 | |
|Advertising supplies expense |20 | |
|Baking supplies expense |25 | |
|Depreciation expense—baking equipment |20 | |
|Interest expense | 5 | |
| |$7,475 |$7,475 |
| | | |
(c)
|GENERAL JOURNAL |
|Date |Account Titles and Explanation |Debit |Credit |
|Dec. |31 |Advertising Supplies Expense ($75 – $50) |25 | |
| | | Advertising Supplies | |25 |
| | | | | |
| |31 |Depreciation Expense, Baking Equipment |20 | |
| | | Accumulated Depreciation— | | |
| | | Baking Equipment ($1,200 ÷ 60) | |20 |
| | | | | |
| |31 |Amortization Expense—Website ($600 ÷ 24) |25 | |
| | | Accumulated Amortization—Website | |25 |
| | | | | |
| |31 |Interest Expense |10 | |
| | | Interest Payable | |10 |
| | | | | |
| |31 |Insurance Expense |100 | |
| | | Prepaid Insurance | |100 |
| | | | | |
| |31 |Accounts Receivable |375 | |
| | | Teaching Revenue | |375 |
| | | | | |
| |31 |Baking Supplies Expense |1,000 | |
| | | Baking Supplies | |1,000 |
| | | | | |
| |31 |Telephone Expense |75 | |
| | | Accounts Payable | |75 |
| | | | | |
| |31 |Salaries Expense (7 hours X $8) |56 | |
| | | Salaries Payable | |56 |
| | | | | |
| |31 |Unearned Revenue ($700 – $300) |400 | |
| | | Teaching Revenue | |400 |
(d)
|COOKIE CREATIONS |
|Adjusted Trial Balance |
|December 31, 2007 |
|Account |Debit |Credit |
|Cash |$1,130 | |
|Accounts receivable |875 | |
|Advertising supplies |50 | |
|Baking supplies |350 | |
|Prepaid insurance |1,100 | |
|Baking equipment |1,200 | |
|Accumulated depreciation—baking equipment | |$ 40 |
|Website |600 | |
|Accumulated amortization—website | |25 |
|Accounts payable | |75 |
|Salaries payable | |56 |
|Interest payable | |15 |
|Unearned revenue | |300 |
|Note payable | |2,000 |
|Common stock | |800 |
|Dividends |500 | |
|Teaching revenue | |4,725 |
|Salaries expense |856 | |
|Telephone expense |125 | |
|Advertising supplies expense |45 | |
|Baking supplies expense |1,025 | |
|Depreciation expense—baking equipment |40 | |
|Amortization expense—website |25 | |
|Insurance expense |100 | |
|Interest expense | 15 |______ |
| |$8,036 |$8,036 |
| | | |
(e)
|COOKIE CREATIONS |
|Income Statement |
|For the Two Months Ended December 31, 2007 |
| | | |
|Revenues | | |
| Teaching revenue | |$4,725 |
|Expenses | | |
| Baking supplies expense |$1,025 | |
| Salaries expense |856 | |
| Telephone expense |125 | |
| Insurance expense |100 | |
| Advertising supplies expense |45 | |
| Depreciation expense |40 | |
| Amortization expense |25 | |
| Interest expense | 15 | |
| Total expenses | | 2,231 |
|Net income | |$2,494 |
| | | |
| | | |
|COOKIE CREATIONS |
|Retained Earnings Statement |
|For the Two Months Ended December 31, 2007 |
|Retained Earnings, November 1 | |$ 0 |
|Add: Net income | | 2,494 |
| | |2,494 |
|Less: Dividends | | 500 |
|Retained Earnings, December 31 | |$1,994 |
(e) (Continued)
|COOKIE CREATIONS |
|Balance Sheet |
|December 31, 2007 |
| Assets | | | |
|Currents assets | | | |
|Cash | | |$1,130 |
|Accounts receivable | | |875 |
|Advertising supplies | | |50 |
|Baking supplies | | |350 |
|Prepaid insurance | | |1,100 |
|Total current assets | | |3,505 |
|Property, plant, and equipment | | | |
|Baking equipment |$1,200 | | |
|Less: Accumulated depreciation—baking | 40 |$1,160 | |
|equipment | | | |
|Intangible asset | | | |
|Website |$ 600 | | |
|Less: Accumulated amortization—website | 25 | 575 | 1,735 |
|Total assets | | |$5,240 |
| | | | |
|Liabilities and Stockholders’ Equity |
|Current liabilities | | | |
|Notes payable | | |$ 2000 |
|Accounts payable ……………………………………………. | | |75 |
|Salaries payable | | |56 |
|Unearned revenue ……………. | | |300 |
|Interest payable | | |15 |
| | | | |
|Total liabilities all Current | | | 2,446 |
| | | | |
|Stockholders’ equity | | | |
|Common stock | |800 | |
|Retained earnings | | 1,994 | 2,794 |
|Total liabilities and stockholders’ equity | | |$5,240 |
| | | | |
(f)
|GENERAL JOURNAL |J4 |
|Date |Account Titles and Explanation |Debit |Credit |
|Dec. |31 |Teaching Revenue |4,725 | |
| | | Income Summary | |4,725 |
| | | | | |
| |31 |Income Summary |2,231 | |
| | | Salaries Expense | |856 |
| | | Telephone Expense | |125 |
| | | Advertising Supplies Expense | |45 |
| | | Baking Supplies Expense | |1,025 |
| | | Depreciation Expense—Baking | | |
| | |Equipment | |40 |
| | | Amortization Expense—Website | |25 |
| | | Insurance Expense | |100 |
| | | Interest Expense | |15 |
| | | | | |
| |31 |Income Summary |2,494 | |
| | | Retained Earnings | |2,494 |
| | | | | |
| |31 |Retained Earnings |500 | |
| | | Dividends | |500 |
(g)
|COOKIE CREATIONS |
|Post-Closing Trial Balance |
|December 31, 2007 |
|Account |Debit |Credit |
|Cash |$1,130 | |
|Accounts receivable |875 | |
|Advertising supplies |50 | |
|Baking supplies |350 | |
|Prepaid insurance |1,100 | |
|Baking equipment |1,200 | |
|Accumulated depreciation—baking equipment | |$ 40 |
|Website |600 | |
|Accumulated amortization—website | |25 |
|Accounts payable | |75 |
|Salaries payable | |56 |
|Interest payable | |15 |
|Unearned revenue | |300 |
|Note payable | |2,000 |
|Common stock | |800 |
|Retained earnings | | 1,994 |
| |$5,305 |$5,305 |
| | | |
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