Question
ACCOUNTING This is 3 part assignment; part 1 and part 2 were answered by coursehero. Part 3 is due now. This is continuation assignment; thus,
ACCOUNTING
This is 3 part assignment; part 1 and part 2 were answered by coursehero. Part 3 is due now. This is continuation assignment; thus, I am posting solved part 1 and part 2 as well.
Part 1
Nov 8Mrs L cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.
Nov 8She opens a bank account under the name "Cookies" and transfers $500 from her personal account to the new account.
Nov 11 Mrs L pays $65 for advertising.
Nov 13 She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. (Hint: Use Supplies account.)
Nov 14 Mrs L starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer that originally cost her $750. Mrs L decides to start using it only in her new business. She estimates that the equipment is currently worth $300. She invests the equipment in the business.
Nov 16 Mrs L realizes that her initial cash investment is not enough. Her grandmother lends her $2,000 cash, for which Mrs L signs a note payable in the name of the business. Mrs L deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the note payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.)
Nov 17 She buys more baking equipment for $900 cash.
Nov 20 She teaches her first class and collects $125 cash.
Nov 25 Mrs L books a second class for December 4 for $150. She receives $30 cash in advance as a down payment.
Nov 30 Mrs L pays $1,320 for a one-year insurance policy that will expire on December 1, 2020.
Note: Part 1 was answered by Leigh_p on 10/Jan/2021 or 11/Jan/2021
Part 2
There is a continuation. By end of November, Mrs L puts together the following additional information:
a.A count reveals that $35 of baking supplies were used during November.
b.Mrs L estimates that all of her baking equipment will have a useful life of 5 years or 60 months. (Assume Mrs L decides to record a full month's worth of depreciation, regardless of when the equipment was obtained by the business.)
c.Mrs L's 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.)
d.On November 30, a friend of Mrs L asks her to teach a class at the neighborhood school. Mrs L agrees and teaches a group of 35 first-grade students how to make gingerbread cookies. The next day, Mrs L 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.
e.Mrs L receives a utilities bill for $45. The bill is for utilities consumed by Mrs L's "Cookies" business during November and is due December 15.
Using the trial balance provided, and based on the new information above, do the following:
COOKIES: Trial Balance: November 30, 2019
DebitCredit
Cash$245
Supplies125
Prepaid Insurance1,320
Equipment1,200
Unearned Service Revenue$30
Notes Payable2,000
Owner's Capital800
Service Revenue125
Advertising Expense65
$2,955$2,955
Using the trial balance provided, and based on the new information above, do the following:
Prepare post the adjusting journal entries.
Prepare an adjusted trial balance.
Using the adjusted trial balance, calculate Cookies' net income or net loss for the month of November 2019.
Note: Part 2 was answered by mialvaran on 16/Jan/2021
Part 3
Mrs L had a very busy December.
At the end of the month, after journalizing and posting the December transactions and adjusting entries, Mrs L prepared the adjusted trial balance seen here.
Adjusted Trial BalanceDecember 31, 2019
DebitCredit
Cash $1,180
Accounts Receivable 875
Supplies 350
Prepaid Insurance 1,210
Equipment 1,200
Accumulated Depreciation-
Equipment $40
Accounts Payable 75
Salaries and Wages Payable 56
Interest Payable 15
Unearned Service Revenue 300
Notes Payable 2,000
Owner's Capital 800
Owner's Drawings 500
Service Revenue 4,515
Salaries and Wages Expense 1,006
Utilities Expense 125
Advertising Expense 165
Supplies Expense 1,025
Depreciation Expense 40
Insurance Expense 110
Interest Expense 15
$7,801 $7,801
Using the information in the adjusted trial balance, do the following:
a.Prepare income statement and an owner's equity statement for the 2 months ended December 31, 2019, and a classified balance sheet as at December 31, 2019.
The note payable has a stated interest rate of 6%, and the principal and interest are due on November 16, 2021.
b.Lily has decided that her year-end will be December 31, 2019. Prepare post-closing entries as of December 31, 2019.
c.Prepare post-closing trial balance.
Income statement. Below is format
Cookies
For the Month Ended (fill in date)
Owner's Equity Statement. Below is format
Cookies
For the Month Ended (fill in date)
Balance Sheet. Below is format
Date
Assets
Liabilities & Owner's Equity
Prepare journal entries. Below is format
General Journal
DateAccount title & ExplanationDebitCredit
Post Closing Trial Balance. Below is format
Date:
AccountDebitCredit
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