1. It's day 1! You just sold yourself $40,000 in equity and obtained a $10,000 loan from your parents. 2. Also on day 1, you purchased some commercial popcorn makers for $15,000. The IRS allows this asset to be depreciated over a 5 year period. You expect a salvage value of $0. 3. You also purchased other supplies like popcorn kernels and salt to be ready for opening day. These purchases were made on credit and total $3,000. 4. In order to protect your new business, at the end of day 1, you purchased small business insurance at a cost of $2,000. This can be expensed immediately. Congratulations you survived day 1 and have been successfully operating your business for the past month. You have slightly slacked off on recording the transactions of your business and need to catch up on recording the month's transactions. 5. During this month, you sold a total of $12,000 in popcorn. No additional inventory was purchased during the month and you now only have $1,000 of inventory remaining. 6. You were also able to rent out your store for a private popcorn event but have not received payment yet. The total charged for use of your building was $2,000. No inventory was used. 7. You hired 2 part time workers to help out on weekends. Your total payroll cost for the month was $4,000. You provided them each with a check but neither worked has cashed their check yet. 8. Since it is the end of the month, you also need to make an interest payment on the loan from your parents. They luckily are only charging you an interest rate of 8%. 9. Your suppliers would also like to be paid so you also write a check for $3,000 to pay for your 1st month's supplies. 10. Finally, before you can go home for the day, in order to keep in accordance with GAAP, you need to record depreciation for the month. Operating (0) Investing (1) Financing (F) Cash AVR Inventory Equipment AD N/P A/P Other Payable Stock R/E Revenues Expenses 6 7 8 9 10