1. In January, 2020 you have decided to start a Pizza place named Delicious in Lefke.

a) Record Delicous' transactions in general journal form. (60 points)

Jan. 1 Unfortunately, you have no money. You sold 10,000 shares of stock to your friends in Exchange for $50,000 in cash.

Date Debit Credit Db Cr

Jan. 4 Purchased an oven for $5000. Made a $3000 cash downpayment and issued an 1-year notes payable for the remaining balance.

Date Debit Credit Db Cr

Jan. 8 Received the electricity bill for the month for the amount of $500. Electricity bill is due January 31.

Date Debit Credit Db Cr

Jan. 10 You bought supplies (ingredients) for the pizzas and paid $50 in cash. You also bought a motorbike on account for $5000 for the delivery boys. You will pay the motorbike later, in one months time.

Date Debit Credit Db Cr

Jan. 15 Some students did not pay for the pizzas. They bought on account. You have billed those students for the amount of $40.

Date Debit Credit Db Cr J an. 16 $10 of supplies you have previously purchased on January 10 was not good. You have returned the supplies and received $10 in cash.

Date Debit Credit Db Cr

Jan. 31 Paid rent for the pizza shop for the amount of $100.

Date Debit Credit Db Cr

Jan. 31 Paid $300 in salaries earned by employees during the month.

Date Debit Credit Db Cr

Jan. 31 Declared a $1000 dividend payable (will be payed later) on May 31.

Date Debit Credit Db Cr

Jan. 31 Paid the electricity bill of $500 you have received on January 8.

Date Debit Credit Db Cr

Jan. 31 Received a $21 payment on the $40 account receivable recorded on January 15.

Date Debit Credit Db Cr

Jan. 31 $450 worth of pizzas were sold in cash for the whole month.

Date Debit Credit Db Cr

The account titles used by Delicious are:

Cash Dividends Supplies Accounts Receivable Sales Revenue Dividends Payable Accounts Payable Electricity Expense Rent Expense Notes Payable Retained Earnings Motorbike Oven Salaries Expense Capital Stock

b) Post each entry to the appropriate ledger accounts and calculate the ending balance. (use the T-account format given below) (14 points) (Do not forget to put the date) Cash Accounts Receivable Debit Credit Debit Credit Balance: Balance:

Accounts Payable Notes Payable Debit Credit Debit Credit Balance: Balance:

Oven Capital Stock Debit Credit Debit Credit Balance: Balance:

Sales Revenue Electricity Expense Debit Credit Debit Credit Balance: Balance:

Motorbike Salaries Expense Debit Credit Debit Credit Balance: Balance:

Supplies Dividends Payable Debit Credit Debit Credit Balance: Balance:

Rent Expense Dividends Debit Credit Debit Credit Balance: Balance:

c) Prepare a trial balance dated January 31, 2020 for Delicious. (14points) DELICIOUS TRIAL BALANCE JANUARY 31, 2020 Debit Credit Total

d) Prepare a balance sheet dated January 31, 2020. Please fill the table below. Please calculate retained earnings. (Yes you can have negative retained earnings!!) (8 points)

DELICIOUS BALANCE SHEET At JANUARY 31, 2020 Assets: Liabilities and Owners Equity: Total Liabilites: Owners Equity: Retained Earnings Total Owners Equity Total Assets Total Libilites and Owners Equity

e) Prepare an income statement for Dogies for the month ended January 31, 2020. (4 points) DELICIOUS INCOME STATEMENT FOR THE MONTH ENDED JANUARY 31, 2020 Revenues: Expenses: Net Income: