Question
1. MPB has been in business for many months already. From 1/1/2011 to 1/31/2011, the following occurred: MPB purchased $10,000 in bakery inventory and paid
1. MPB has been in business for many months already. From 1/1/2011 to 1/31/2011, the following occurred:
MPB purchased $10,000 in bakery inventory and paid cash to the suppliers.
MPB sold $15,000 in cupcakes to customers on account (cash payment not expected for a few months); cost of suppliers used is $5,000
MPB recorded bakery equipment depreciation expense of $1,000
2. CMB has been in business for many months already. From 1/1-1/31/2011, the following occurred:
CMB purchased $10,000 in bakery inventory on account to suppliers.
CMB sold $15,000 in cupcakes to customers for cash; cost of suppliers used is $5,000
CMB recorded bakery equipment depreciation expense of $1,000
Required:
a. For each event, provide the required journal entries to record the event.
b. Prepare the income statements for MPB and CMB from 1/1/2011 to 1/31/2011.
c. Using the indirect method to calculate the cash flows from operations starting from net incomes for MPB and CMB.
Step by Step Solution
3.45 Rating (155 Votes )
There are 3 Steps involved in it
Step: 1
a Journal Entry for MPB 112011 Bakery Inventory 10000 Cash 10000 1312011 Accounts Receivable 15...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started