1. Excel spreadsheet with all the documentation required to complete requirements 1, 2, and 3.

You have been called in to help Karen Nicole who has recently started a graphic design business known as Karens Designs, Inc. Karen began operations on May 1, 2023, and had limited activity in her first month. Karen has provided a summary of all of her activities during the month of May 2023. Karen is an astute business person, but has limited experience with accounting and would like your assistance with understanding how the activities of her business should be interpreted. Specific deliverables are listed below.

May 1. Karen invested $10,000 into her business in exchange for 5000 shares of common stock.

May 2. Karen purchased a six month business insurance policy for $1,200.

May 5. Karen signed a six months lease on a shared office for $500 per month. Karen paid the entire amount of the lease in advance.

May 7. Karen paid $2500 for office supplies which are expected to last for five months.

May 10. Karen borrowed $5,000 from a family friend at an interest rate of 10%. Interest and principle are due in one year.

May 12. Karen received $7,000 from Wagner Enterprises, a client, for design work to be completed in July.

May 17. Karen completed $12,000 design work for Sir William Industries on account. Payment is due in 30 days.

May 20. Karen completed $3,000 design work for DunnRite Scholastic Programs on account. Payment is due in 30 days.

May 31. Karen completed an inventory of supplies and determined that $2,100 of supplies are on hand.

Assignment 1.

Review the transactions and develop a chart of accounts for Karens Designs, Inc. The chart of accounts should list the name of the account, the type of account (e.g, asset, liability, revenue, etc.) and where the account will appear (e.g., balance sheet, income statement, etc.)

Example: Account Name Account Type Financial Statement Cash Asset Balance Sheet

2. Record the transactions using the horizontal balance sheet method used throughout the course minilectures. Set up an Excel spreadsheet with all of the accounts identified in part 1 of this assignment listed in the columns of the spreadsheet. Accounts should appear in the following order: Assets Liabilities Equity Revenue Expense Record each transaction in the rows under the account name. The last two columns should be for the statement of cash flows. Indicate the amount of the change in cash (+,-) and the type of cash flow (e.g., Investing, Financing, Operating) Record any necessary adjusting entries in the spreadsheet. Determine the ending balance in each account by summing each column.

Example: Note this is not a complete illustration. All assets, liabilities and equity should be listed, and revenues and expenses and statement of cash flow should also be included after the balance sheet accounts. Assets Liabilities Equity Date Cash Accounts Receivable Notes Payable Stock Retained Earnings May 1 10,000 10,000

3. Prepare the income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for Karens Designs Note: Create tabs in the Excel worksheet to help with each of these tasks.

4. Prepare a presentation to explain the chart of accounts, each transaction, and each of the financial statements that you prepared. Assume that Karen is your audience and remember that she is an astute business professional with limited knowledge of accounting.