At the beginning of December, Madison finds out that Batter Blender Supply Co. has raised the cost of their mixers to $615 each, so she will only make one more purchase from them this month. She was lucky enough to find comparable mixers at Garcia Co., a local manufacturer, so she has signed a contract to buy mixers from them this month. Garcia Co. also has a $610 cost for each mixer. She still plans to sell them for $ 1,200. Madison is running out of storage space in her small apartment, so she decides to rent a small office space to hold all of her supplies and inventory. Rent is due at the beginning of each month.

The following transactions occurred during the month of December.

Dec. 1 Paid $700 rent for the month of December. Check 166.

2 Purchased three mixers on account from Batter Blender Supply Co. for $1,845, terms n/30.

4 Paid $45 freight for the December 2 purchase. Check 167.

6 Sold three mixers for $3,600 on account to Seafood Shack, invoice 1012, terms n/30.

7 Bought four mixers on account from Garcia Co. for $2,440, terms n/30.

8 Collected the amount due from Peters Pastries for the November 23 transaction.

9 Returned one of the mixers purchased on Dec 7^th because it was damaged during shipping. Garcia Co. issues Sweet Treats credit for the cost of the mixer.

10 Paid Batter Blender the amount due for the December 2 purchase. Check 168.

12 Bought three mixers on account from Garcia Co. for $1,830, terms n/30.

13 Paid $45 freight for the December 7 purchase. Check 169.

16 Three mixers are sold on account for $3,600 to the Chop House, invoice 1013, terms n/30.

16 One mixer is sold to a new customer, Bagel Depot, on account for $1,200, invoice 1014, terms n/30.

18 Paid a $75 cell phone bill for December. Check 170.

19 Paid $45 freight for items received on the December 12 purchase. Check 171.

20 Taught a 3hr cupcake making class at Winslow Sweets for $150 per hour. Winslow Sweets paid in full at the end of the class.

20 Paid Garcia Co. the amount due for the December 7 purchase. Check 172.

20 Collected the amount due from Chop House for the December 16 transaction.

21 Purchased baking supplies for $350 cash. Check 173.

23 Issued a check to Madisons assistant for $960 for the first two weeks in December. Check 174.

23 Two mixers are sold on account for $2,400 to the Chop House, invoice 1015, terms n/30.

24 Taught a 2hr holiday cookie workshop at Young Souls, the local senior center. Madison offered her workshop at a discounted price of $50 per hour. She left invoice 1016 with the director of Young Souls after the workshop.

26 Collected the amount due from Bagel Depot for the December 16 transaction.

27 Madison withdrew $1,200 cash for personal use. Check 175.

As of December 31, the following adjusting entry data is available.

1. Accrued utilities total $340 for the current month.

2. Another months worth of depreciation needs to be recorded on the baking equipment.

3. A count reveals that $135 of baking supplies are remaining in the supply room.

4. Another months worth of insurance has expired.

5. Madison owes her assistant $960 for the last two weeks of December, but will not pay it until January 2.

6. Madison records another month of accrued interest on her grandmas loan.

At year end, Madison completes all the financial statements and closes out the year. Madison is making huge strides in her entrepreneurship program by starting up Sweet Treats and she cannot thank her friends and family enough for all their support. In the new year, Madison intends on continuing to sell mixers and provide classes on multiple baking needs. She is even considering attending culinary classes at CNM to learn new things she can incorporate into her business.

J2 Credit Ref. Date Oct. 31 General Journal Account Titles and Explanations Baking supplies expense Baking supplies (adjust for supplies used) Debit 45.00 45.00 Oct. 31 10.00 Depreciation expense Accum Depr - Equipment (adjust for depreciation) 10.00 Oct. 31 31.25 Interest expense Interest payable (accrue interest on note payable at 7.5%) 31.25 Oct. 31 45.00 Salaries and Wages Expense Salaries and Wages Payable (accrue wages owed) 45.00 Nov. 30 10.00 Depreciation expense Accum Depr - Equipment (adjust for depreciation) 10.00 Nov. 30 100.00 Insurance Expense Prepaid insurance (record use of one month of insurance) 100.00 Nov. 30 31.25 Interest expense Interest payable (accrue interest on note payable at 7.5%) 31.25 General Ledger Credit Ref. J1 Debit 600.00 J1 J1 75.00 140.00 300.00 Cash Date Oct. 8 Oct. 11 Oct. 13 Oct. 16 Oct. 17 Oct. 20 Oct. 25 Oct. 30 Nov. 30 Nov. 30 Nov. 30 J1 J1 5,000.00 Explanation Opening deposit Advertising Expense Baking supplies Equipment Note Payable Purchased Equipment Service Revenue Owner Draw Purchased Insurance policy Cash Receipts Journal Cash Payments Journal No. 101 Balance 600.00 525.00 385.00 85.00 5,085.00 4,185.00 4,320.00 4,220.00 3,020.00 8,920.00 1,655.00 J1 900.00 J1 135.00 100.00 1,200.00 J1 J1 CR1 CP1 5,900.00 7,265.00 Credit Accounts Receivable Date Explanation Oct. 30 Services performed Nov. 30 Sales Journal Nov. 30 Cash Receipts Journal Ref. J1 S1 CR1 Debit 300.00 3,600.00 No. 112 Balance 300.00 3,900.00 3,600.00 300.00 Credit Debit 5,220.00 Inventory Date Nov. 30 Nov. 30 Nov. 30 Nov. 30 Nov. 30 Explanation Purchases Journal Sales Journal Cash Receipts Journal Cash Payments Journal Cash Payments Journal Ref. P1 S1 CR1 CP1 CP1 1,740.00 1,740.00 No. 120 Balance 5,220.00 3,480.00 1,740.00 1,815.00 1,875.00 75.00 60.00 Adjustments Dr. Cr. Income Statement Dr. Cr. Trial Balance Dr. Cr. 3,320.00 300 Adjusted Trial Bal. Dr. Cr. 3,320.00 300.00 Balance Sheet Dr. Cr. 3,320.00 300.00 45.00 140.00 1,200.00 1,200.00 95.00 1,200.00 1,200.00 95.00 1,200.00 1,200.00 10.00 10.00 10.00 45.00 31.25 Account Titles Cash Accounts Receivable Inventory Baking Supplies Prepaid Insurance Equipment Accum. Depr.-Equipment Accounts Payable Salaries and Wages Payable Interest Payable Notes Payable Owner's Capital Owner's Drawings Service Revenue Sales Revenue Cost of Goods Sold Advertising Expense Baking Supplies Expense Depreciation Expense Insurance Expense Salaries and Wages Expense Rent Expense Utilities Expense Interest Expense 45.00 35.00 5,000.00 900.00 45.00 35.00 5,000.00 5,000.00 900.00 900.00 100.00 100.00 100.00 435.00 435.00 435.00 75.00 45.00 10.00 75.00 45.00 10.00 75.00 45.00 10.00 45.00 45.00 45.00 31.25 35.00 35.00 TOTALS 6,335.00 6,335.00 131.25 131.25 6,425.00 6,245.00 Net Income TOTALS 210.00 210.00 435.00 435.00 6,215.00 6,215.00 Purchases Journal Date Ref. Account Credited Accounts Payable Accounts Payable Nov. 4 P1 Inventory Dr. Accounts Payable Cr. 2,900.00 2,320.00 Terms terms n/30 x terms n/30 x Nov. 9 5,220.00 November Totals Accounts 120/201 Purchases Journal P2 Inventory Dr. Accounts Payable Cr. Date Account Credited Terms Ref. December Totals Accounts Cash Payments Journal CP1 Date 6-Nov 11-Nov 15-Nov 20-Nov 21-Nov 29-Nov 30-Nov 30-Nov Chk. No. 158 159 160 161 162 163 164 165 Account Debited Inventory - freight Inventory - freight Salaries and Wages Payable Utilities Expense - phone bill Accounts Payable - Batter Blender Accounts Payable - Batter Blender Salaries and Wages Expense Owner's Drawings Ref. 120 120 212 732 726 306 Other Accounts Accounts Payable Dr. Dr. 75.00 60.00 45.00 155.00 2,900.00 2,320.00 960.00 750.00 Cash Cr. 75.00 60.00 45.00 155.00 2,900.00 2,320.00 960.00 750.00 November Totals Accounts 2,045.00 5,220.00 201.00 7,265.00 101.00 Cash Payments Journal CP2 Other Accounts Dr. Accounts Payable Dr. Date Chk. No. Account Debited Ref. Cash Cr. December Totals Accounts Invoice No. Date Account Debited 23-Nov Accounts Receivable - Peter's Pastries - 3 mixers Ref. Accts. Rec. Dr. Sales Rev. Cr. 3,600.00 COGS Dr. Inventory Cr. 1,740.00 1011 November Totals Accounts 3,600.00 112/401 1,740.00 505/120 Sales Journal S2 Invoice No. Accts. Rec. Dr. Sales Rev. Cr. COGS Dr. Inventory Cr. Date Account Debited Ref. December Totals Accounts Sales Journal Invoice No. 1011 Date Account Debited 23-Nov Accounts Receivable - Peter's Pastries - 3 mixers S1 COGS Dr. Inventory Cr. 1,740.00 Accts. Rec. Dr. Sales Rev. Cr. 3,600.00 Ref. November Totals Accounts 3,600.00 112/401 1,740.00 505/120 Sales Journal S2 Invoice No. Accts. Rec. Dr. Sales Rev. Cr. COGS Dr. Inventory Cr. Date Account Debited Ref. December Totals Accounts Cash Receipts Journal CR1 COGS Dr. Inventory Cr. Accts. Rec. Cr. Sales Rev. Cr. Other Accounts Cr. 2,000.00 Ref. 301 Date Account Credited 10-Nov Owner's Capital 22-Nov Accounts Receivable - Newbury 26-Nov Cash sales Cash Dr. 2,000.00 300.00 3,600.00 300.00 X 3,600.00 1,740.00 November Totals Accounts 5,900.00 101 300.00 112 3,600.00 401 2,000.00 X 1,740.00 505/120 Cash Receipts Journal Other Accounts Cr. CR2 COGS Dr. Inventory Cr. Date Account Credited Ref. Cash Dr. Accts. Rec. Cr. Sales Rev. Cr. December Totals Accounts . o 1 Chop House 2 Date Ref. Debit Credit Balance Credit Newbury Elementary School Date Ref. Debit 30-Oct X 300.00 22-Nov CR1 Balance 300.00 3 300.00 4 5 6 7 8 9 Peter's Pastries 0 Date 1 23-Nov Seafood Shack Date Ref. Credit Ref. Debit Credit Balance Debit 3,600.00 Balance 3,600.00 S1 2 3 4 5 6 7 Young Souls 8 Date 9 0 1 Ref. Debit Credit Balance 2 3 4 5 6 7 Trial Balance Dr. Cr. December Worksheet Adjustments Adjusted Trial Bal. Dr. Cr. Dr. Cr. Income Statement Dr. Cr. Balance Sheet Dr. Cr. Account Titles Cash Accounts Receivable Inventory Baking Supplies Prepaid Insurance Equipment Accum. Depr.-Equipment Accounts Payable Salaries and Wages Payable Interest Payable Notes Payable Owner's Capital Owner's Drawings Service Revenue Sales Revenue Cost of Goods Sold Advertising Expense Baking Supplies Expense Depreciation Expense Insurance Expense Salaries and Wages Expense Rent Expense Utilities Expense Interest Expense TOTALS Net Income TOTALS J2 Credit Ref. Date Oct. 31 General Journal Account Titles and Explanations Baking supplies expense Baking supplies (adjust for supplies used) Debit 45.00 45.00 Oct. 31 10.00 Depreciation expense Accum Depr - Equipment (adjust for depreciation) 10.00 Oct. 31 31.25 Interest expense Interest payable (accrue interest on note payable at 7.5%) 31.25 Oct. 31 45.00 Salaries and Wages Expense Salaries and Wages Payable (accrue wages owed) 45.00 Nov. 30 10.00 Depreciation expense Accum Depr - Equipment (adjust for depreciation) 10.00 Nov. 30 100.00 Insurance Expense Prepaid insurance (record use of one month of insurance) 100.00 Nov. 30 31.25 Interest expense Interest payable (accrue interest on note payable at 7.5%) 31.25 General Ledger Credit Ref. J1 Debit 600.00 J1 J1 75.00 140.00 300.00 Cash Date Oct. 8 Oct. 11 Oct. 13 Oct. 16 Oct. 17 Oct. 20 Oct. 25 Oct. 30 Nov. 30 Nov. 30 Nov. 30 J1 J1 5,000.00 Explanation Opening deposit Advertising Expense Baking supplies Equipment Note Payable Purchased Equipment Service Revenue Owner Draw Purchased Insurance policy Cash Receipts Journal Cash Payments Journal No. 101 Balance 600.00 525.00 385.00 85.00 5,085.00 4,185.00 4,320.00 4,220.00 3,020.00 8,920.00 1,655.00 J1 900.00 J1 135.00 100.00 1,200.00 J1 J1 CR1 CP1 5,900.00 7,265.00 Credit Accounts Receivable Date Explanation Oct. 30 Services performed Nov. 30 Sales Journal Nov. 30 Cash Receipts Journal Ref. J1 S1 CR1 Debit 300.00 3,600.00 No. 112 Balance 300.00 3,900.00 3,600.00 300.00 Credit Debit 5,220.00 Inventory Date Nov. 30 Nov. 30 Nov. 30 Nov. 30 Nov. 30 Explanation Purchases Journal Sales Journal Cash Receipts Journal Cash Payments Journal Cash Payments Journal Ref. P1 S1 CR1 CP1 CP1 1,740.00 1,740.00 No. 120 Balance 5,220.00 3,480.00 1,740.00 1,815.00 1,875.00 75.00 60.00 Adjustments Dr. Cr. Income Statement Dr. Cr. Trial Balance Dr. Cr. 3,320.00 300 Adjusted Trial Bal. Dr. Cr. 3,320.00 300.00 Balance Sheet Dr. Cr. 3,320.00 300.00 45.00 140.00 1,200.00 1,200.00 95.00 1,200.00 1,200.00 95.00 1,200.00 1,200.00 10.00 10.00 10.00 45.00 31.25 Account Titles Cash Accounts Receivable Inventory Baking Supplies Prepaid Insurance Equipment Accum. Depr.-Equipment Accounts Payable Salaries and Wages Payable Interest Payable Notes Payable Owner's Capital Owner's Drawings Service Revenue Sales Revenue Cost of Goods Sold Advertising Expense Baking Supplies Expense Depreciation Expense Insurance Expense Salaries and Wages Expense Rent Expense Utilities Expense Interest Expense 45.00 35.00 5,000.00 900.00 45.00 35.00 5,000.00 5,000.00 900.00 900.00 100.00 100.00 100.00 435.00 435.00 435.00 75.00 45.00 10.00 75.00 45.00 10.00 75.00 45.00 10.00 45.00 45.00 45.00 31.25 35.00 35.00 TOTALS 6,335.00 6,335.00 131.25 131.25 6,425.00 6,245.00 Net Income TOTALS 210.00 210.00 435.00 435.00 6,215.00 6,215.00 Purchases Journal Date Ref. Account Credited Accounts Payable Accounts Payable Nov. 4 P1 Inventory Dr. Accounts Payable Cr. 2,900.00 2,320.00 Terms terms n/30 x terms n/30 x Nov. 9 5,220.00 November Totals Accounts 120/201 Purchases Journal P2 Inventory Dr. Accounts Payable Cr. Date Account Credited Terms Ref. December Totals Accounts Cash Payments Journal CP1 Date 6-Nov 11-Nov 15-Nov 20-Nov 21-Nov 29-Nov 30-Nov 30-Nov Chk. No. 158 159 160 161 162 163 164 165 Account Debited Inventory - freight Inventory - freight Salaries and Wages Payable Utilities Expense - phone bill Accounts Payable - Batter Blender Accounts Payable - Batter Blender Salaries and Wages Expense Owner's Drawings Ref. 120 120 212 732 726 306 Other Accounts Accounts Payable Dr. Dr. 75.00 60.00 45.00 155.00 2,900.00 2,320.00 960.00 750.00 Cash Cr. 75.00 60.00 45.00 155.00 2,900.00 2,320.00 960.00 750.00 November Totals Accounts 2,045.00 5,220.00 201.00 7,265.00 101.00 Cash Payments Journal CP2 Other Accounts Dr. Accounts Payable Dr. Date Chk. No. Account Debited Ref. Cash Cr. December Totals Accounts Invoice No. Date Account Debited 23-Nov Accounts Receivable - Peter's Pastries - 3 mixers Ref. Accts. Rec. Dr. Sales Rev. Cr. 3,600.00 COGS Dr. Inventory Cr. 1,740.00 1011 November Totals Accounts 3,600.00 112/401 1,740.00 505/120 Sales Journal S2 Invoice No. Accts. Rec. Dr. Sales Rev. Cr. COGS Dr. Inventory Cr. Date Account Debited Ref. December Totals Accounts Sales Journal Invoice No. 1011 Date Account Debited 23-Nov Accounts Receivable - Peter's Pastries - 3 mixers S1 COGS Dr. Inventory Cr. 1,740.00 Accts. Rec. Dr. Sales Rev. Cr. 3,600.00 Ref. November Totals Accounts 3,600.00 112/401 1,740.00 505/120 Sales Journal S2 Invoice No. Accts. Rec. Dr. Sales Rev. Cr. COGS Dr. Inventory Cr. Date Account Debited Ref. December Totals Accounts Cash Receipts Journal CR1 COGS Dr. Inventory Cr. Accts. Rec. Cr. Sales Rev. Cr. Other Accounts Cr. 2,000.00 Ref. 301 Date Account Credited 10-Nov Owner's Capital 22-Nov Accounts Receivable - Newbury 26-Nov Cash sales Cash Dr. 2,000.00 300.00 3,600.00 300.00 X 3,600.00 1,740.00 November Totals Accounts 5,900.00 101 300.00 112 3,600.00 401 2,000.00 X 1,740.00 505/120 Cash Receipts Journal Other Accounts Cr. CR2 COGS Dr. Inventory Cr. Date Account Credited Ref. Cash Dr. Accts. Rec. Cr. Sales Rev. Cr. December Totals Accounts . o 1 Chop House 2 Date Ref. Debit Credit Balance Credit Newbury Elementary School Date Ref. Debit 30-Oct X 300.00 22-Nov CR1 Balance 300.00 3 300.00 4 5 6 7 8 9 Peter's Pastries 0 Date 1 23-Nov Seafood Shack Date Ref. Credit Ref. Debit Credit Balance Debit 3,600.00 Balance 3,600.00 S1 2 3 4 5 6 7 Young Souls 8 Date 9 0 1 Ref. Debit Credit Balance 2 3 4 5 6 7 Trial Balance Dr. Cr. December Worksheet Adjustments Adjusted Trial Bal. Dr. Cr. Dr. Cr. Income Statement Dr. Cr. Balance Sheet Dr. Cr. Account Titles Cash Accounts Receivable Inventory Baking Supplies Prepaid Insurance Equipment Accum. Depr.-Equipment Accounts Payable Salaries and Wages Payable Interest Payable Notes Payable Owner's Capital Owner's Drawings Service Revenue Sales Revenue Cost of Goods Sold Advertising Expense Baking Supplies Expense Depreciation Expense Insurance Expense Salaries and Wages Expense Rent Expense Utilities Expense Interest Expense TOTALS Net Income TOTALS