On June 1, 2014, Natalie becomes both a shareholder and chief administrator of operations of Koebel's Family Bakery Ltd. Aft er much discussion with her parents, Janet and Brian, Natalie decides not to accept the Biscuits retail chain's offer to supply oatmeal chocolate chip cookies. At this point, Natalie believes that it is best to focus on providing Coffee Beans, the national coffee shop, with all of its cupcake requirements. After becoming comfortable with Coffee Beans' contractual commitment and determining the extent of oven space available, Natalie and Koebel's Family Bakery can then reconsider the Biscuits offer.

Natalie obtains a copy of Koebel's Family Bakery Ltd.'s trial balance at June 30 to become familiar with the organization's accounting records.

While a number of transactions have already been recorded and posted for the month of June, there are other transactions listed below that have not yet been recorded in the accounting records:
June 2 A one-year insurance policy is purchased for $15,360. Th is policy represents property insurance on the buildings and equipment for the period June 1, 2014 to May 31, 2015. (Th e balance in the Prepaid Insurance account represents a one-year vehicle-insurance policy on a delivery truck, recorded in the Vehicles account, purchased on January 1.)
5 Natalie attends to the receipt of advertising supplies. 5,000 brochures were purchased on account from Nakhooda Printing for $2,500.
16 Koebel's Family Bakery purchases baking equipment for $2,520 cash to accommodate the production of cupcakes.
18 Natalie's good friend is getting married in July and wants Koebel's Family Bakery to provide a wedding cake and cupcakes for the wedding celebration. A $500 cash deposit is received in advance.
19 Natalie teaches a cookie-making class that was booked a number of months ago. A $100 deposit had been received in advance and is included in the Unearned Revenue account. $300 is collected in cash at the end of the class, representing the remaining balance due.
20 The first order for the preparation of 200 dozen miniature cupcakes is received from Coffee Beans.
Natalie supervises the preparation of these cupcakes. She ensures that there are adequate amounts of baking ingredients on hand and that the order is appropriately filled.
23 200 dozen cupcakes are delivered to the Coff ee Beans warehouse in Calgary. An invoice of $2,040 for the preparation of these cupcakes is included.
27 A $100 invoice for use of Natalie's cell phone is received. Th e cell phone is used exclusively for
Koebel's Family Bakery's business. Th e invoice is for services provided in June and is due on July 15.
30 Natalie receives her first paycheque from Koebel's Family Bakery, $3,250.
30 250 dozen cupcakes are delivered to the Coffee Beans warehouse in Calgary. An invoice of $2,550 for the preparation of these cupcakes is included.
Instructions
(a) Using T accounts, enter the opening balances in the general ledger as at June 30.
(b) Journalize the above transactions.
(c) Post the journal entries to the general ledger.
(d) Prepare an updated trial balance at June 30.

Transcribed Image Text:

KOEBEL'S FAMILY BAKERY LTD. Trial Balance June 30, 2014 Credit Merchandise inventory 2 depreciation-buildings $137,500 depreciation-equipment Bank loan payable Mortgage payable 6 2 $942,696 $942,696