Accounting 115

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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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