Audrey Jhingree opened an ice cream parlor in a university town. The parlor specializes in ice cream combinations named after popular professors in the business department of the university. You have been hired as a manger. Your duties include maintaining the store's financial records. The following transactions occurred in April 2012, the first month of operations: Received cash of $40,000 total ($10,000 each) from four investors. Each investor received 100 shares of common stock. This took place on April 01. Paid three months' rent for the store on April 01 at $2,000 per month (recorded as prepaid expenses). Purchased ice cream and cones for $6,000 on account payable, due in 60 days. This took place on April 02. Purchased supplies for $1,000 cash on April 02. Received a two-year $11,000 loan at the bank. The note payable is dated April 02. Used the money from (e) to purchase a computer for $3,000 (for record keeping and inventory tracking) and to purchase used $8,000 of furniture and fixtures for the store. Placed a grand opening advertisement in the local paper for $600 cash. Made sales in the first half of the month totaling $5,000: $4,250 was in cash and the rest was on accounts receivable. The cost of the ice cream sold was $2,000. Made a $600 payment on accounts payable on April 18. Incurred and paid employee wages of $2000 for the month of April. Collected accounts receivable of $700 from customers. Made a repair to one of the refrigerators for $300. Made sales in the last half of the month for $6,000, all for cash. The cost of the ice cream sold was $2,400. Using the information provided above, complete the following for Audrey Jhingree's ice cream parlor. To complete this problem, you may wish to use the Assessment 2, Problem 1 Template, which is linked in the Resources under the Capella Resources heading. Set up appropriate T-accounts for cash, accounts receivable, supplies, inventory, prepaid expenses, equipment, furniture and fixtures, accounts payable, notes payable, contributed capital, sales revenue, cost of goods sold (expense), advertising expense, wage expense, and repair expense. All accounts begin with zero balances. Record in the T-accounts the effects of each transaction for Audrey's shop in April, referencing each transaction in the accounts with the transaction letter. Show the ending balances in the T-accounts. Note that transactions (h) and (m) require two types of entries, one for sales and one for cost of goods sold. Prepare trial balances for 4/30/12. Prepare financial statements at the end of the month ended April 30, 2012. Hint: Do the income statement first, followed by the statement of stockholders' equity, and then the balance sheet. Properly label each statement: Does it cover a period of time or just a point in time? Write a short memo to Audrey offering your opinion on the results of operations during the first month of business.

Learner: Mark D Diaz Jhingree Ice Cream Cash Accounts Receivable Supplies Prepaid Expenses - Accounts Payable Furniture & Fixtures Note Payable - Inventory - Equipment - - Sales Revenue Cost of Goods Sold - Advertising Expense Contribution Capital Factory Building - Repair Expense Learner: Mark D Diaz Jhingree Ice Cream Jhingree Ice Cream Trial Balance 30-Apr-12 (a) (e) (h) (k) (m) Cash 40,000.00 11,000.00 4,250.00 700.00 6,000.00 61,950.00 40,450.00 (c) Inventory 6,000.00 6,000.00 1,600.00 6,000.00 1,000.00 11,000.00 600.00 600.00 2,000.00 300.00 21,500.00 (b) (d) (f ) (g) (i) (j) (l) 2,000.00 (h) 2,400.00 (m) 4,400.00 (h) Accounts Receivable 750.00 700.00 (k) (d) Supplies 1,000.00 (f) Equipment 3,000.00 50.00 (b) (i) Prepaid Expenses 6,000.00 Accounts Payable 600.00 6,000.00 (c ) Note Payable 11,000.00 (e) 5,400.00 Cash Accounts Receivable Supplies Inventory Prepaid Expenses Equipment Furniture and Fixtures Accounts Payable Notes Payable Common Stock Sales Cost of Goods Sold Advertising Wages Repairs Totals (f) (g) Furniture & Fixtures 8,000.00 Sales Revenue 5,000.00 (h) 6,000.00 (m) 11,000.00 Advertising Expense 600.00 (j) Contribution Capital 40,000.00 (a) Factory Building 2,000.00 (h) (m) (l) Cost of Goods Sold 2,000.00 2,400.00 4,400.00 Repair Expense 300.00 Debit 40,450.00 50.00 1,000.00 1,600.00 6,000.00 3,000.00 8,000.00 Credit 5,400.00 11,000.00 40,000.00 11,000.00 ### 4,400.00 600.00 2,000.00 300.00 67,400.00 = Debits MUST = Credits Total Debit and Credits = $67,400 67,400.00 Learner: Mark D Diaz Jhingree Ice Cream Income Statement For the Month Ended April 30, 2012 Sales Less: Cost of Goods Sold Gross Profit Less: Expenses Advertising Wages Repairs Net Income $ 11,000.00 4,400.00 6,600.00 $ 600.00 2,000.00 300.00 2,900.00 $ 3,700.00 Net Income = $3700 33.64% Learner: Mark D Diaz Jhingree Ice Cream Statement of Cash Flow For the Month Ended April 30, 2012 Contributed Capital: Balance, April 01 Add: Issue of Common Stock Total Contributed Capital $ 40,000.00 40,000.00 $ $ $ $ 3,700.00 3,700.00 43,700.00 Retained Earnings: Balance, April 01 Add: Net Income Retained Earnings, April 30 Total Shareholder's Equity Total = $43,700 9.25% Learner: Jhingree Ice Cream Balance Sheet April 30, 2012 Assets Cash Liabilities $ 40,450.00 50.00 Accounts Payable Total Current Liabliites Notes Payable Total Long Term liabliites Total Liabilities Accounts Receivable Supplies Inventory Prepaid Expenses Total Current Assets Equipment Furniture and Fixtures Total Equipment, Furniture and Fixtures 1,000.00 1,600.00 6,000.00 49,100.00 3,000.00 8,000.00 5,400.00 5,400.00 11,000.00 11,000.00 16,400.00 Stockholders' Equity Shareholders Equity 43,700.00 11,000.00 Total Assets $ Total Assets = $60,100 Current Ratio = $ 909.26% 60,100.00 Total Liabilities and Owner's Equity $ 60,100.00 Learner: Part 4. Problem 1: Audrey's Ice Cream Parlor Account Part 5. 2014 2013 Total assets Total liabilities Total contributed capital plus retained earnings Total sales Net income $93,000 $23,000 $70,000 $78,000 $61,000 $23,000 $16,500 $55,000 $44,500 ### $15,000 $82,500 $57,250 $10,500 $4,500 2014 2013 Average Assets 85500 69500 Average Capital 62500 49750 2012