Question
A trial balance is presented below for November 30, 2019. COOKIE CREATIONS Trial Balance November 30, 2019 Debit Credit Cash $245 Supplies 125 Prepaid Insurance
A trial balance is presented below for November 30, 2019.
COOKIE CREATIONS Trial Balance November 30, 2019 | ||||
---|---|---|---|---|
Debit | Credit | |||
Cash | $245 | |||
Supplies | 125 | |||
Prepaid Insurance | 1,320 | |||
Equipment | 1,200 | |||
Unearned Service Revenue | $30 | |||
Notes Payable | 2,000 | |||
Common Stock | 800 | |||
Service Revenue | 125 | |||
Advertising Expense | 65 | |||
$2,955 | $2,955 |
It is the end of November and Natalie has been in touch with her grandmother. Her grandmother asked Natalie how well things went in her first month of business. Natalie, too, would like to know if the company has been profitable or not during November. Natalie realizes that in order to determine Cookie Creations income, she must first make adjustments. Natalie puts together the following additional information.
1. | A count reveals that $35 of baking supplies were used during November. | |
2. | Natalie estimates that all of her baking equipment will have a useful life of 5 years or 60 months. (Assume Natalie decides to record a full months worth of depreciation, regardless of when the equipment was obtained by the business.) | |
3. | Natalies grandmother has decided to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (Assume that half a month of interest accrued during November.) | |
4. | On November 30, a friend of Natalies asks her to teach a class at the neighborhood school. Natalie agrees and teaches a group of 35 first-grade students how to make Santa Claus cookies. The next day, Natalie prepares an invoice for $300 and leaves it with the school principal. The principal says that he will pass the invoice along to the head office, and it will be paid sometime in December. | |
5. | Natalie receives a utilities bill for $45. The bill is for utilities consumed by Natalies business during November and is due December 15. |
Prepare the adjusting journal entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. | Date | Account Titles and Explanation | Debit | Credit |
---|---|---|---|---|
1. | ||||
2. | ||||
eTextbook and Media |
List of Accounts
Post the adjusting journal entries. (Post entries in the order of journal entries presented in the previous question.)
Cash | |||||
---|---|---|---|---|---|
Date | Explanation | Ref. | Debit | Credit | Balance |
Nov. 30 | Balance | 245 | |||
Accounts Receivable | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Nov. 30 | J2 | enter a debit amount | enter a credit amount | enter the adjusted account balance | |
Supplies | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Nov. 30 | Balance | 125 | |||
30 | J2 | enter a debit amount | enter a credit amount | enter the adjusted account balance | |
Prepaid Insurance | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Nov. 30 | Balance | 1,320 | |||
Equipment | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Nov. 30 | Balance | 1,200 | |||
Accumulated DepreciationEquipment | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Nov. 30 |
Prepare an adjusted trial balance.
COOKIE CREATIONS Adjusted Trial Balance choose the accounting period For the Quarter Ended November 30, 2019For the Month Ended November 30, 2019November 30, 2019 | |||
---|---|---|---|
Debit | Credit |
Using the adjusted trial balance, calculate Cookie Creations net income or net loss for the month of November 2019.
select an option Net lossNet income | $enter amount in dollars for the net income or net loss for the month of November 2019 |
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