1. 2. 3. 4. Date 9/02/23 9/02/23 Deposit #1 9/03/23 Deposit No. /Check No. 9/03/23 Ck #1001 Ck #1002 Description Bella Boone met with her lawyer and CPA for advice on starting the business. They decided that Ms. Boone would organize the business as a corporation. The lawyer told Ms. Boone to register the company name, "Bella's Balloon Bouquet, Inc." with the County of El Paso. In addition, Ms. Boone will get an employer identification number (EIN) from the Internal Revenue Service and get a sales tax permit from the state of Texas. The lawyer agreed to prepare the Articles of Incorporation to be filed with the Secretary of State of Texas. The CPA has agreed to help Ms. Boone set up her accounting system. Ms. Boone opened a business checking account at Wells Fargo Bank by depositing the personal check she gave her company for $20,000. The corporation issued her a stock certificate for 1,000 shares of common stock. Ms. Boone signed a one-year rental agreement with Reynolds Realtors for shop space. She was required to pay $2,400 for rent for the months of September 1, 2023- December 31, 2023. Arranged for a general business liability insurance policy and paid $2,800 to State Penn Insurance. This premium is for six months coverage. 5. 6. 7. 8. 9/03/23 9/05/23 9/05/23 9/06/23 9. 9/06/23 10. 9/08/23 Deposit #2 Ck #1003 Ck #1004 Ck #1005 Purchased a new register/computer system that cost $3,600 from Office Mart for use in the business. Ms. Boone signed a six-month, 12% installment note payable for the cost of the system. The computer system has an estimated useful life of 4 years and the residual (salvage) value is $0. This will be recorded as Computer Equipment and depreciated using the Straight-Line Depreciation method. The depreciation will be recorded in the adjusting journal entries in part 2. Signed a note payable to borrow $5,000 from Wells Fargo Bank. Interest is 9% annually and the note is to be repaid with interest in six months. Purchased a delivery van for $16,000 from Marvin's Motors. The estimated service life of this asset is 5 years. The residual (salvage value) is $1,000. This will be recorded as Delivery Van and depreciated using the Straight-Line Depreciation Method in the adjusting journal entries. Depreciation will be recorded in the adjusting entries in part 2. Paid $600 to have Bella's logo painted on the side of the van. This should be added to the cost of the van and depreciated over the life of the van. Paid $500 for business cards, flyers, and posters. This will be recorded as prepaid advertising. Purchased $900 of inventory-helium from Hector's Helium on account. The vendor extended credit terms of 2/15, n/30. 11. 9/08/23 12. 9/13/23 13. 9/18/23 14. 9/18/23 15. 9/18/23 16. 9/18/23 17. 9/19/23 Ck #1006 Deposit #3 Purchased $6,200 of inventory-balloons from Balloon Blast on account. The vendor extended credit terms of 2/15 n/30. Ms. Boone received and paid the $800 charge from her lawyer. Bella's Balloon Bouquet, Inc. is now open for business. Sales will be both retail and wholesale. Retail customers will purchase online and at the shop and will be charged an 8.25% sales tax. Ms. Boone will allow major customers to charge their purchases on account and then pay later. Sold a balloon arch to UTEP for homecoming on account for $4,000. The cost of the balloons is $1,700. The cost of the helium is $500. UTEP does not have to pay sales tax on the purchase. Purchased $300 of ribbon and string (used in making the arrangements) on account. This is to be treated as supplies. Purchased additional balloons from Balloon Blast on account, for $7,500. Credit terms are 2/10, n/30. Recorded cash sales for the first five days of operation. Sales totaled $6,000 and the sales tax collected totaled $495. A total of 18. 9/20/23 Ck #1007 Feng 19. 9/22/23 Ck #1008 20. 9/22/23 21. 9/23/23 22. 9/23/23 23. 9/23/23 Deposit #4 than Ck #1009 24. 9/23/23 Ck #1010 $6,495 was deposited in the bank. The cost of merchandise sold was $4,200. (Balloons were $3,900 and helium was $300) Received and paid the $300 invoice for supplies, string, ribbons purchased on 9/18/23. Paid the invoice from Hector's Helium from 9/08/23. Ordered $700 of helium on account. Ms. Boone donated a balloon bouquet to the Humane Society fund raiser. She felt that this was a good way to advertise her new business. Her business was listed as a sponsor and a large ad was put in the fund raiser program. Cost of the balloons were $600 and the helium was $100. Ms. Boone considers this an advertising expense. Received payment in full from UTEP. The payment was deposited in the bank. Ms. Boone paid her credit card bill for the month. The bill was $300 which was for gas for the delivery van and $50 was for decorative ribbons used for the Humane Society balloon arrangement. Purchased and paid for $50 of shipping supplies. 25. 9/23/23 26. 9/23/23 TOM 001 27. 9/25/23 28. 9/28/23 29. 9/30/23 30. 9/30/23 Deposit #5 Ck #1011 oy glod of Deposit #6 Ck #1012 Deposit #7 31. 9/30/23 Ck #1013 32. 9/30/23 Ck #1014 Internet and retail sales totaled $7,000 and sales taxes of $560 was collected. The cost of the merchandise sold was $4,500 (Balloons $4,000; Helium $500). The money was deposited in the bank. Paid the balance due to Balloon Blast. There are two invoices; one Here are on 9/8/23 and the other on 9/18/23. Collected and deposited $2,300 of payments. Sales tax totaled $189.75. The cost of the merchandise sold was $1,050. (Balloons $1,000; Helium $50). Received but did not pay the utility bill for the month, $120. Paid the first monthly installment on the computer equipment. The payment amount is $636. Of this amount, $36 is for interest and $600 is for principal. Make the check payable to Office Mart. Recorded internet sales for the last week of the month. Sales of $3,400 were deposited. The cost of the merchandise sold was $1,250 (Balloons $1,200; Helium $50). Sales tax collected is $280.50 Paid all sales tax owed for September to the Comptroller of Public Accounts. Declared and paid cash dividend of $100 to Bella Boone. 1 2 3 4 5 6 7 8 9 Transaction / Event 10 11 12 13 14 14 15 16 17 17 18 19 20 Date 9/2/23 9/2/23 9/3/23 9/3/23 9/3/23 9/5/23 9/5/23 9/6/23 9/6/23 9/8/23 9/8/23 9/13/23 9/18/23 9/18/23 9/18/23 9/19/23 Practice Set 1 9/19/23 Account Name No journal entry required Cash Common Stock Paid-in Capital in Excess of par : Common Stock Prepaid Rent Cash Prepaid Insurance Cash 9/18/23 No journal entry required Accounts Receivable 9/18/23 Computer Equipment Note Payable: Office Mart Cash Note Payable: Wells Fargo Bank Delivery Van Cash Delivery Van Cash Prepaid Advertising Cash Inventory: Helium Accounts Payable Inventory: Balloons Accounts Payable Legal Expense Cash Sales Cost of Goods Sold Inventory: Balloons Inventory: Helium Prepaid Supplies Accounts Payable Inventory: Balloons Accounts Payable Cash Sales Sales Tax Payable Cost of Goods Sold Inventory: Balloons Inventory: Helium 9/20/23 Accounts Payable Cash 9/22/23 Accounts Payable Cash 9/22/23 Inventory: Helium Accounts Payable $ 0 20,000 2,400 2,800 3,600 5,000 16,000 600 500 Debit 900 6,200 800 0 4,000 2,200 300 7,500 6,495 4,200 300 900 700 $ 0 Done Credit 1,000 19,000 2,400 2,800 3,600 5,000 16,000 600 500 900 6,200 800 0 4,000 1,700 500 300 7,500 6,000 495 3,900 300 300 900 700 121 22 23 124 25 25 26 27 127 28 29 30 30 31 32 9:44 9/23/23 9/23/23 9/23/23 9/23/23 9/23/23 9/23/23 9/23/23 9/25/23 9/25/23 9/28/23 9/30/23 9/30/23 9/30/23 Practice Set 1 Advertising and Promotion Expense Inventory: Balloons Inventory: Helium Cash Accounts Receivable Credit Card Expense Cash 9/30/23 Shipping Supplies Cash Cash Sales Sales Taxes Payable Cost of Goods Sold Inventory: Balloons Inventory: Helium Accounts Payable Inventory: Ballons Cash Cash Sales Sales Tax Payable Cost of Goods Sold Inventory: Balloons Inventory: Helium Utility Expense Utilities Payable Interest Expense Note Payable: Office Mart Cash Cash Sales Sales Tax Payable Cost of Goods Sold Inventory: Balloons Inventory: Helium Sales Tax Payable Cash 9/30/23 Dividends Cash 700 6,495 350 50 7,560 4,500 13,700 2,489.75 1,050 120 36 600 3,680.50 1,250 1,525.25 100 Done 600 100 6,495 350 50 7,000 560 4,000 500 274 13,426 2,300 189.75 1,000 50 120 636 3,400 280.5 1,200 50 1,525.25 100 Record Adjusting Entries: Record the following month end adjusting entries for the month of September. Write the journal entries in the practice set after the original journal entries and round to the nearest cent. a. $50 of supplies remained on hand. b. $10 of shipping supplies remained on hand. c. $1,000 of wages for the part-time help from Irene's Temp Services for September should be accrued. Do not worry about payroll taxes; Temp Services Inc. will handle these. d. Make the necessary adjusting entry for one month's depreciation for the van using Straight Line Depreciation. e. Make the necessary adjusting entry for the computer equipment using Straight Line Depreciation. f. One month of the prepaid insurance has expired. g. One month of the prepaid rent has expired. h. $300 of prepaid advertising remains on hand i. Record the interest on the loan from Wells Fargo. Make sure you prepare the adjusting entries and write them in the template for the adjusting entries. Follow the same instructions for the adjusting journal entries that you did in part one. Once the adjusting entries have been completed in the spreadsheet use the spreadsheet to answer the questions in Blackboard then upload the spreadsheet to Blackboard. Follow these instructions. Step 1: Enter the journal entries into the Excel Template spreadsheet and when completed print it out. Step 2: Use the Excel spreadsheet to answer the questions in Blackboard for the corresponding week in the content folder. Step 3: Once you complete entering information into Blackboard, upload the spreadsheet into Blackboard by clicking on the navigation pane then clicking on Practice Set.