Case #4: Lady Leaf and her "Tea experience" business

Johanna Strauss had worked for more than 25 years as the executive assistant of top managers in large Canadian corporations. After retirement she decided to go on a trip around the world until she gets bored or drops dead. After 20 months in her 'voyage' Johanna decided to return to Toronto due to a complicated health condition. After the initial treatment was completed Johanna needed to have regular check ups and not being confident in herself as before she decided to stay in Toronto all the time. Johanna has been always extremely active and in this new stage of her life she couldn't sit still. At this stage she was not interested in working for others as her health made her not very reliable, so she decided to start her own business with a passion she discovered in her 'voyage': prepare and serve tea as it should be done. Her target market or audiences are selected meetings organized by top executives or their partners in their houses.

On January 1st 2016 Johanna or Lady Leaf as she wanted to be called set up a company to formalize the tea service she has been experiencing with her friends and acquaintances. A friend help her to prepare a business plan that was ready to be presented at her friend's bank so she can get some extra financing if needed, in the meantime this friend was so sure about Johanna's idea that decided to lend her $10,000 for 5 years with an interest rate of 3% per year. On January 2nd Johanna sets up her company: Tea Experience with a capital of 10,000 shares valued at $5 each. A lawyer produced all the needed paperwork.

On January 3rd Johanna opens a bank account under the name of Tea Experience Corp. depositing the $10,000 from her plus the $10,000 loaned by her friend. On January 4th Johanna transfers ownership of her sets of tea equipment to the company. All of her tea equipment is high end while one is very rare and exclusive. The equipment has a fair market value of $7,500 and is estimated to last for 5 years and then, if not broken, can be sold for $1,500. She also made sure to transfer the insurance contract for her tea equipment from her to the company as well, the contract started on October 1st 2015. The insurance premium is $900 per year and it was paid in full when signed on October 1st 2015. On the same day Johanna signs in for the services of a ride sharing app that would allow her to call a car to go and come back from the places of the customers that hire her.

The following is a list of transactions that occurred during the first month of operations of "Tea Experience Corp":

January 4th Completed the purchase of an exquisite wood box fitted to carry and maintain intact the quality of tea leaves for $3,000. The box, which will be paid in full on January 5th 2017, will be used during 5 full years with no resale value at the end.

January 5th Completed the purchase of an exquisite selection of tea leaves and mixtures for $2,000. 50% was paid in cash, the other 50% will be paid in 30 days.

January 7th Great start of business serving several events for a large and well known international charity. Got a cheque for $3,000 for her services and $2,000 in account to be collected on Jan 31st.

January 7th Paid $400 of transportation to the ride sharing service.

January 15th Hired a carpenter to improve the look of her exquisite wood box (this will not change the value or the useful life of the box). The work is completed and Johanna paid $300 on January 20th and promised to pay the rest ($700) on February 20th.

January 20th Provided her services for two small events. One promised to pay $500 of February 10th, while the other will pay the $500 by the end of February.

January 20th Provided services in an afternoon event at a local church. Johanna collected $200 for all her services.

January 20th Paid $100 of transportation to the ride sharing service.

January 23rd Paid for a new professional outfit $80 (clothes) and a hair salon $40 that included labour, materials and tax. This was needed so she can be presentable at the high end event she will be providing services on January 25th.

January 23rd Ordered 300 personal cards and 100 brochures. Total paid for the rush order is $500 ($1 each personal card and $2 each brochure). Johanna will start distributing them at the high end event of January 25th.

January 25th One big event was serviced. The bill of $4,000 was paid 50% before the beginning of the event and the rest in 30 days. Johanna was able to distribute 100 personal cards and 20 brochures.

January 29th Received the bill from the lawyer that helped her to set up the company for $900 payable by February 15th.

January 30th Received a deposit of $800 for servicing a mid afternoon get together on February 29th. The group wanted to reserve the date to do something special in her house as it only happens once every 4 years.

January 31st Having consumed 100% of the tea at hand she purchases on account more tea for $1,000.

Additional information

January 31st The online bank statement for the month of January shows bank fees of $25.

January 31st The phone bill for $120 was received for the month of January, the payment is due on February 9th.

January 31st Johanna does not collect $2,000 from a service provided on Jan 7th.

Prepare "T" Accounts in ACCRUAL and CASH basis for this case using the following chart of accounts, when relevant, prepare the Income statement, Statement of Retained Earnings and Balance Sheet and then answer the questions.

RevenueAdvertising ExpenseBank feesDepreciation ExpenseExpense on EquipmentCGSInsurance ExpenseInterest ExpensePhone ExpensePurchasesSelling ExpensesARTransportation ExpenseAccumulated DepreciationCashOrganization CostsPrepaid AdvertisingInventoryPrepaid insuranceTea equipmentTea Equipment (Box)Advances from customersEquipment PayableAPInterest PayableOrganization Costs PayableLoan PayablePhone payableCommon SharesRetained Earnings

What is the amount of Bank Fees Expense at the end of January 31 (after AJE)? Use accrual accounting.

between $21 and $30

$0

between $11 and $20

between $1 and $10

more than $30

kindly prepare all t accounts as per both cash and accrual basis

10 PO Case Lady Leat and her "Te experience business Johann Strauss had worked for more than 25 yeuses the executive start of top managers in large Canadian corporations. Aner retirement she decided to go on a rp around the world uret she gets bored or drop dead. After 20 morens her voyage Johanna decided to return to Toroma due to a complicated health conditon. After the treatment was completed Johanna needed to have regular check up and not being confidentin Perself as before she decided to stay in Toronto theme Johann has been always extremely actve and in this new age of her life she couldn't Atthis stage she was not terested in working for others as he health made her not very reliable so she decided to start her own business with a pestion she discovered in her Voyage prepare and sente as it should be done. Her target market or audiences are selected meetingsorganised by top executives or their partners in their houses On January 2016 Johanna Lady of as she wanted to be called set up a company to formale the tea service she has been experiencing with her friends and core Afriend help her to prepare a business plantat was ready to be presented at her friends Dansk so she can get some extra financing needed. In the meantime this and was so sure about John's idea that ocided to lend her $10000 for 5 years with an interest rate of per year Onlay 2nd Johannesets up her company Tea Experience on capital of 10000 Shares valued at each Alawyer produced ali the needed paperwork On January 3rd Johanna opens a bank account under the name of Tea Experience Corp depositing the $10000 from her piste 50.000 loanted by her friend. On Jawy 4th chane anders gesp of her sees often couper to the company. All other teamet high end weone is very rare and exclusive The equipment has a formar eve of 2500 and is estimated to it for 5 years and the broken can be sold for SSCO. She also made sure to transfer the sunce contract for her tea oment om her to the company as wel, me contract started on October 2015. The Insurance premium is 5900 Der and It was peld in the signed on October ist 2015 On the same day Jokainen for the services of a ndesharing at would allow her to cal a car to go and come back from the places of the customers that he he The following a totections that occurred during the first month at operations of Tea Exonence Corps Jah Completed the purchase of neque wood boxed Santanderton Internaty of teaves for S3000. The box which would on January 2017 bused during 5 hal years with no resale value the end ray 5th Completed the purchase of an une secton of lees and modes for $2.000 305 din cathotherwibe paid in 20 January 7 Grestart of business serving events for a large and well known in the Gata chegue for 53.000 for $2.000 account to be collected on Jonah Pod 100 ofensportation to the destange January Sun Hendapenter to move koberce wood with change the core o The word and cha300 un Jenay 20th and promised to pay the 5700 on February 20 January 20n Provide hersenices too smalts One Day 500 utstyle the other poye S500 office January 20th Ponded with inconvece che handlede 300 hes Jest 20 Paid 5100 of reportagervice Jersey Paid for projectes comendo 40 cod cod This can be rendesent the exces on any aruary 300 pesos poderohen each committed 2571 men met med tre 54,000 was caderas Janday 29th Recorated her to the on Recenas deco 5000 Ft-ototeca SHWE hogy be Technician Detect G January 29th Received the bit from the lower that helped her to set up the company for 100 payable by February 15th January 30th Received a depoult of $800 for servicing a mid afternoon get together on February 20th. The croup wanted to reserve the date to do something special in her house as it only happens once every 4 years. January 31st Having consumed 100% of the tea at hand she purchases on account more too for $1000, Additional information January 31st The online bank statement for the month of January shows bank fees of $25. January 31st The phone bell for S120 was received for the month of January, the payment is due on February 9th January 31st Johanna does not collect $2,000 from a service provided on Jan 7th. Prepare Accounts In ACCRUAL and CASH basis for this case using the following chart of accounts, when relevant prepare the income statement, Statement of Retained Earnings and Balance Sheet and then answer the questions Revenue Advertising Expense Bank fees Depreciation Expense Expense on Equipment OGS Insurance Expense interest Expense Phone Expense Purchases Selling Expenses AR Transportation Expense Accumulated Depreciation Cash Organize Sion Cors Prepaid Adve sing Inventory Preseid insurance Tea equipment Tec Equipment Box Avances from customers Equipment Payable Interest Payable Organization Costs Payable Loan Payable Phone payable Cammon Shares Retained Earnings What is the amount of Bank Fees Expense at the end of January 31 (after AJE? Use accrual accounting between S21 and 530 O 50 between $11 and 520 between S1 and 510 more than $30 2021 olved -> LA Dhe Case Layew and her a perence business Johan Swashad worked for more than 25 years as the executive stof top managers in large Canadian corporation. Aner retirement she deaded to go on a paround the world until she gets bored or drop dead. After 20 months in her Voyager Johanna dedded 10 Punto Tonto due to a complicated health conditioner treatment was correlated on teeded to have regular check ups and not being confident in herself as before she decided to stay in Toronto all the time, Johanna has been always extremely active and interewitage of the Ife she could stage she was niet terested in working for others her heathade her not very reliable, so she decided to start her own business with a passion she discovered in her Voyage prepare and serve te should be dere. Her a pet motor audiences are selected me organized by top executives or the partners in the houses On January 2016 Johanne or Lady Leaf as she wanted to be clied set up a company to formate the les service she has been experiencing wherrends and acquaintances. A friend help her to prepare a business plan that was ready to be presented at her friends bank so the consome extra francing needed. In the method was so sebou Johanna's idea that decided to lend her 30.000 for 5 years wth on rest one of 3% per year on January 2rid Johanna sets up her company Tea Experience with a canal of 10.000 shares valued at each Awyev produced all the needed paperwork On Jay Sharna opers a basketort under the name of Tea Denne Corp deposong the $10,000 om her put the Stoned by refund on January 4th Johanna transfers ownership of her sets of tea equipment to the company. All of her tea pent Is high end while one is very rare and exclusive. The couprentes for market value of $7.500 and is estimated to look for 5 years and then fotbroken, can be sold for S1500 She also made sure to transfer the insurance contract for teacupent from her to the Come swel the commented on October 2015 The murance pro 500 per year and it was peldisful when signed on October 2015. On the same day Johanna sign in for the services of a ride shop that would allow her to cal a car to go and come back from the places of the customers that hire her The following actions that occurred during the first month of operations of Ten Ecernor Corp anary th Completed the purchase ct en exquiste wood boutined to carry and maintain intact the quality of tea leaves for $2.000 The box which we be paid in tof on Jeruary 5th 2017, will be used during 5 years with no reset the end Shted the purchase of an egue selecson of te lees endures for $2.000.50% was peld in cashthe other 50%be pad in 30 days January 7th Great start of Business serving several ever for a large and well international chaty Getachegue for 53.000 for her services and 52.000 n account to be collected on Jan 31st Jayh Ped 5400 of onto the deshering service January Sa Mired carpenter to improve the look of het excited bowl of change the value or the cell ile at the bou The work is completed and Johanna paid $300 on January 2017 and promised to pay the test 15700) on February 2011 January 20 Provided here for two mal events. One promised to pay $500 of February 10, the other way the $500 by the end of February January 20 Provided services in an attemoon event at a local chach Johanna collected $200 for at her services January 20 Paid of transportation to rende shanng service January 23rd Pd for a new prestal of $80 (dothes and a horson 540 that included about monenlandia This is needed so she can be presentable at the highend even she will be providing services on January 25th Bary 23d Ordered 300 persones and 100 brochures. Total paid for the righdets 5500 strach pracord and $2 each brochur channa wil start but them at the high and event of Jeruty 25th nary One Devent was serviced The tot 405 was e 50% before the beginning of the event and the rest in 30 days. Johana wable to distribute 100 personal cards and 20 brochures Received me on the we that beloed her to set up the company for 5000 preble by February 15 Lyon Pecevedot 5000 for serving as an out together on February 2: The group wanted to receive the dare to do something special in her houtes tanyent once every 4 January 31st Hinges 100 che hand she ou chases on account more les for 1000 Adomation en het The orientatehere month of a thoirtees of $25 Jays The there for $20 received fish than the partis que on February ..che does not collect 52.000 m Vice prodotto AR Revenue Advertising Expense Bank fees Depreciation Expense Expense on Equipment CGS Insurance Expense Interest Expense Phone Expense Purchases Selling Expenses Transportation Expense Accumulated Depreciation Cash Organization Costs Prepaid Advertising Inventory Prepaid insurance Tea equipment Tea Equipment (Box Advances from customers Equipment Payable LAP Interest Payable Orgel von Costs Payable Loon Payable Phone payable Common Shares Retained Earnings What is the Total of Current Assets at the end of January as reported in the Balance Sheet? Use cash accounting. Use cash accounting. between $24,001 and $30,000 between $18,001 and $24,000 less than $10.000 more than $30,000 between $10.001 and $18,000 Insurance Experte Interest Expense Phone Expense Purchases Selling Expenses AR Transportation Expense Accumulated Depreciation Cash Organization Costs Prepaid Advertising Inventory Prepaid insurance Tea equipment Tea Equipment (Box Advances from customers Equipment Payable AP Interest Payable Organization Costs Payable Loan Payable Phone payable Common Shares Retained Earnings What is the Total of all Assets at the end of January as reported in the Balance Sheet? Use accrual accounting. Use accrual accounting between $41.201 and $42,200 more than $42.200 less than $30,000 between $30.001 and $38,100 between $38,101 and $41,200 om/hmtpx- 0.07 19077375876015 1613910515527 Case #4 Lady Leaf and her "Tea experience business Johanna Strauss had worked for more than 25 years as the executive assistant of top managers in large Canadian corporations. After retirement she decided to go on a trip around the world until she gets bored or drops dead. After 20 months in her 'voyage' Johanna decided to return to Toronto due to a complicated health condition. After the initial treatment was completed Johanna needed to have regular check ups and not being confident in herself as before she decided to stay in Toronto all the time. Johanna has been always extremely active and in this new stage of her life she couldn't sit still At this stage she was not interested in working for others as her health made her not very reliable, so she decided to start her own business with a passion she discovered in her 'voyage' prepare and serve tea as it should be done. Her target market or audiences are selected meetings organized by top executives or their partners in their houses On January 1st 2016 Johanna or Lady Leaf as she wanted to be called set up a company to formalize the tea service she has been experiencing with her friends and acquaintances. A friend help her to prepare a business plan that was ready to be presented at her friend's bank so she can get some extra financing if needed in the meantime this friend was so sure about Johanna's idea that decided to lend her $10,000 for 5 years with an interest rate of 3% per year. On January 2nd Johanna sets up her company Tea Experience with a capital of 10,000 shares valued at $5 each A lawyer produced all the rieeded paperwork On January 3rd Johanna opens a bank account under the name of Tea Experience Corp depositing the $10.000 from her plus the $10,000 loaned by her friend. On January 4th Johanna transfers ownership of her sets of tea equipment to the company. All of her tea equipment is high end while one is very rare and exclusive. The equipment has a fair market value of $7,500 and is estimated to last for 5 years and then, if not broken, can be sold for $1.500 She also made sure to transfer the insurance contract for her tea equipment from her to the company as well the contract started on October 1st 2015 The insurance premium is $900 per year and it was paid in full when signed on October 1st 2015 On the same day Johanna signs in for the services of a ride sharing app that would allow her to call a car to go and come back from the places of the customers that hire her The following is a list of transactions that occurred during the first month of operations of "Tea Experience Corp January 4th Completed the purchase of an exquisite wood box fitted to carry and maintain intact the quality of tea leaves for $3,000. The box, which will be paid in full on January 5th 2017 will be used during 5 full years with no resale value at the end January 5th Completed the purchase of an exquisite selection of tea leaves and mixtures for $2,000 50% was paid in cash the other 50% will be paid in 30 days hp January 7th Great start of business serving several events for a large and well known international charity Got a cheque for $3,000 for her services and $2,000 in account to be collected on Jan 31st January 7th Paid $400 of transportation to the ride sharing service January 15th Hired a carpenter to improve the look of her exquisite wood box (this will not change the value or the useful life of the box). The work is completed and Johanna paid $300 on January 20th and promised to pay the rest ($700) on February 20th. January 20th Provided her services for two small events One promised to pay $500 of February 10th, while the other will pay the $500 by the end of February January 20th Provided services in an afternoon event at a local church Johanna collected $200 for all her services January 20th Paid $100 of transportation to the ride sharing service January 23rd Paid for a new professional outfit $80 (clothes) and a hair salon $40 that included labour, materials and tax This was needed so she can be presentable at the high end event she will be providing services on January 25th January 23rd Ordered 300 personal cards and 100 brochures, Total paid for the rush order is $500 ($1 each personal card and $2 each brochurej. Johanna will start distributing them at the high end event of January 25th January 25th One big event was serviced. The bill of $4,000 was paid 50% before the beginning of the event and the rest in 30 days. Johanna was able to distribute 100 personal cards and 20 brochures January 29th Received the bill from the lawyer that helped her to set up the company for $900 payable by February 15th January 30th Received a deposit of $800 for servicing a mid afternoon get together on February 29th. The group wanted to reserve the date to do something special in her house as it only happens once every 4 years January 31st Having consumed 100% of the tea at hand she purchases on account more tea for $1.000 Additional information op or the teu at hand she purchases on account more tea for $1,000. Additional information January 31st The online bank statement for the month of January shows bank fees of $25 January 31st The phone bill for $120 was received for the month of January, the payment is due on February 9th January 31st Johanna does not collect $2,000 from a service provided on Jan 7th Prepare "T" Accounts in ACCRUAL and CASH basis for this case using the following chart of accounts, when relevant, prepare the income statement, Statement of Retained Earnings and Balance Sheet and then answer the questions. Revenue Advertising Expense Bank fees Depreciation Expense Expense on Equipment CGS Insurance Expense interest Expense Phone Expense Purchases Selling Expenses AR Transportation Expense Accumulated Depreciation Cash Organization Costs Prepaid Advertising Inventory Prepaid insurance Tea equipment Tea Equipment (Box) Advances from customers Equipment Payable AP interest Payable Organization Costs PayableLoan Payable Phone payable Common Shares Retained Earnings What is the total of the account Retained Earnings reported in the Balance Sheet at the end January? Use accrual accounting more than $6,000 between $4,001 and $6,000 between $1 and $2.000 (hp using Inventory Prepaid insurance Tea equipment Tea Equipment (Box) Advances from customers Equipment Payable AP Interest Payable Organization Costs Payable Loan Payable Phone payable Common Shares Retained Earnings What is the amount of Bank Fees Expense at the end of January 31 (after AJE? Use accrual accounting between $21 and $30 $0 between $11 and $20 between $1 and $10 O more than $30 32021 McGraw-H l Education. All rights reserved (ip) Interest Payable Phone payable Organization Costs Payable Loan Payable Common Shares Retained Earnings What is the Total of Current Assets at the end of January as reported in the Balance Sheet? Use cash accounting. Use cash accounting between $24,001 and $30,000 between $18,001 and $24,000 less than $10,000 more than $30,000 between $10,001 and $18,000 0 2021 McGraw-Hal Education. All rights reserved COD 050 or 1c o & 10 PO Case Lady Leat and her "Te experience business Johann Strauss had worked for more than 25 yeuses the executive start of top managers in large Canadian corporations. Aner retirement she decided to go on a rp around the world uret she gets bored or drop dead. After 20 morens her voyage Johanna decided to return to Toroma due to a complicated health conditon. After the treatment was completed Johanna needed to have regular check up and not being confidentin Perself as before she decided to stay in Toronto theme Johann has been always extremely actve and in this new age of her life she couldn't Atthis stage she was not terested in working for others as he health made her not very reliable so she decided to start her own business with a pestion she discovered in her Voyage prepare and sente as it should be done. Her target market or audiences are selected meetingsorganised by top executives or their partners in their houses On January 2016 Johanna Lady of as she wanted to be called set up a company to formale the tea service she has been experiencing with her friends and core Afriend help her to prepare a business plantat was ready to be presented at her friends Dansk so she can get some extra financing needed. In the meantime this and was so sure about John's idea that ocided to lend her $10000 for 5 years with an interest rate of per year Onlay 2nd Johannesets up her company Tea Experience on capital of 10000 Shares valued at each Alawyer produced ali the needed paperwork On January 3rd Johanna opens a bank account under the name of Tea Experience Corp depositing the $10000 from her piste 50.000 loanted by her friend. On Jawy 4th chane anders gesp of her sees often couper to the company. All other teamet high end weone is very rare and exclusive The equipment has a formar eve of 2500 and is estimated to it for 5 years and the broken can be sold for SSCO. She also made sure to transfer the sunce contract for her tea oment om her to the company as wel, me contract started on October 2015. The Insurance premium is 5900 Der and It was peld in the signed on October ist 2015 On the same day Jokainen for the services of a ndesharing at would allow her to cal a car to go and come back from the places of the customers that he he The following a totections that occurred during the first month at operations of Tea Exonence Corps Jah Completed the purchase of neque wood boxed Santanderton Internaty of teaves for S3000. The box which would on January 2017 bused during 5 hal years with no resale value the end ray 5th Completed the purchase of an une secton of lees and modes for $2.000 305 din cathotherwibe paid in 20 January 7 Grestart of business serving events for a large and well known in the Gata chegue for 53.000 for $2.000 account to be collected on Jonah Pod 100 ofensportation to the destange January Sun Hendapenter to move koberce wood with change the core o The word and cha300 un Jenay 20th and promised to pay the 5700 on February 20 January 20n Provide hersenices too smalts One Day 500 utstyle the other poye S500 office January 20th Ponded with inconvece che handlede 300 hes Jest 20 Paid 5100 of reportagervice Jersey Paid for projectes comendo 40 cod cod This can be rendesent the exces on any aruary 300 pesos poderohen each committed 2571 men met med tre 54,000 was caderas Janday 29th Recorated her to the on Recenas deco 5000 Ft-ototeca SHWE hogy be Technician Detect G January 29th Received the bit from the lower that helped her to set up the company for 100 payable by February 15th January 30th Received a depoult of $800 for servicing a mid afternoon get together on February 20th. The croup wanted to reserve the date to do something special in her house as it only happens once every 4 years. January 31st Having consumed 100% of the tea at hand she purchases on account more too for $1000, Additional information January 31st The online bank statement for the month of January shows bank fees of $25. January 31st The phone bell for S120 was received for the month of January, the payment is due on February 9th January 31st Johanna does not collect $2,000 from a service provided on Jan 7th. Prepare Accounts In ACCRUAL and CASH basis for this case using the following chart of accounts, when relevant prepare the income statement, Statement of Retained Earnings and Balance Sheet and then answer the questions Revenue Advertising Expense Bank fees Depreciation Expense Expense on Equipment OGS Insurance Expense interest Expense Phone Expense Purchases Selling Expenses AR Transportation Expense Accumulated Depreciation Cash Organize Sion Cors Prepaid Adve sing Inventory Preseid insurance Tea equipment Tec Equipment Box Avances from customers Equipment Payable Interest Payable Organization Costs Payable Loan Payable Phone payable Cammon Shares Retained Earnings What is the amount of Bank Fees Expense at the end of January 31 (after AJE? Use accrual accounting between S21 and 530 O 50 between $11 and 520 between S1 and 510 more than $30 2021 olved -> LA Dhe Case Layew and her a perence business Johan Swashad worked for more than 25 years as the executive stof top managers in large Canadian corporation. Aner retirement she deaded to go on a paround the world until she gets bored or drop dead. After 20 months in her Voyager Johanna dedded 10 Punto Tonto due to a complicated health conditioner treatment was correlated on teeded to have regular check ups and not being confident in herself as before she decided to stay in Toronto all the time, Johanna has been always extremely active and interewitage of the Ife she could stage she was niet terested in working for others her heathade her not very reliable, so she decided to start her own business with a passion she discovered in her Voyage prepare and serve te should be dere. Her a pet motor audiences are selected me organized by top executives or the partners in the houses On January 2016 Johanne or Lady Leaf as she wanted to be clied set up a company to formate the les service she has been experiencing wherrends and acquaintances. A friend help her to prepare a business plan that was ready to be presented at her friends bank so the consome extra francing needed. In the method was so sebou Johanna's idea that decided to lend her 30.000 for 5 years wth on rest one of 3% per year on January 2rid Johanna sets up her company Tea Experience with a canal of 10.000 shares valued at each Awyev produced all the needed paperwork On Jay Sharna opers a basketort under the name of Tea Denne Corp deposong the $10,000 om her put the Stoned by refund on January 4th Johanna transfers ownership of her sets of tea equipment to the company. All of her tea pent Is high end while one is very rare and exclusive. The couprentes for market value of $7.500 and is estimated to look for 5 years and then fotbroken, can be sold for S1500 She also made sure to transfer the insurance contract for teacupent from her to the Come swel the commented on October 2015 The murance pro 500 per year and it was peldisful when signed on October 2015. On the same day Johanna sign in for the services of a ride shop that would allow her to cal a car to go and come back from the places of the customers that hire her The following actions that occurred during the first month of operations of Ten Ecernor Corp anary th Completed the purchase ct en exquiste wood boutined to carry and maintain intact the quality of tea leaves for $2.000 The box which we be paid in tof on Jeruary 5th 2017, will be used during 5 years with no reset the end Shted the purchase of an egue selecson of te lees endures for $2.000.50% was peld in cashthe other 50%be pad in 30 days January 7th Great start of Business serving several ever for a large and well international chaty Getachegue for 53.000 for her services and 52.000 n account to be collected on Jan 31st Jayh Ped 5400 of onto the deshering service January Sa Mired carpenter to improve the look of het excited bowl of change the value or the cell ile at the bou The work is completed and Johanna paid $300 on January 2017 and promised to pay the test 15700) on February 2011 January 20 Provided here for two mal events. One promised to pay $500 of February 10, the other way the $500 by the end of February January 20 Provided services in an attemoon event at a local chach Johanna collected $200 for at her services January 20 Paid of transportation to rende shanng service January 23rd Pd for a new prestal of $80 (dothes and a horson 540 that included about monenlandia This is needed so she can be presentable at the highend even she will be providing services on January 25th Bary 23d Ordered 300 persones and 100 brochures. Total paid for the righdets 5500 strach pracord and $2 each brochur channa wil start but them at the high and event of Jeruty 25th nary One Devent was serviced The tot 405 was e 50% before the beginning of the event and the rest in 30 days. Johana wable to distribute 100 personal cards and 20 brochures Received me on the we that beloed her to set up the company for 5000 preble by February 15 Lyon Pecevedot 5000 for serving as an out together on February 2: The group wanted to receive the dare to do something special in her houtes tanyent once every 4 January 31st Hinges 100 che hand she ou chases on account more les for 1000 Adomation en het The orientatehere month of a thoirtees of $25 Jays The there for $20 received fish than the partis que on February ..che does not collect 52.000 m Vice prodotto AR Revenue Advertising Expense Bank fees Depreciation Expense Expense on Equipment CGS Insurance Expense Interest Expense Phone Expense Purchases Selling Expenses Transportation Expense Accumulated Depreciation Cash Organization Costs Prepaid Advertising Inventory Prepaid insurance Tea equipment Tea Equipment (Box Advances from customers Equipment Payable LAP Interest Payable Orgel von Costs Payable Loon Payable Phone payable Common Shares Retained Earnings What is the Total of Current Assets at the end of January as reported in the Balance Sheet? Use cash accounting. Use cash accounting. between $24,001 and $30,000 between $18,001 and $24,000 less than $10.000 more than $30,000 between $10.001 and $18,000 Insurance Experte Interest Expense Phone Expense Purchases Selling Expenses AR Transportation Expense Accumulated Depreciation Cash Organization Costs Prepaid Advertising Inventory Prepaid insurance Tea equipment Tea Equipment (Box Advances from customers Equipment Payable AP Interest Payable Organization Costs Payable Loan Payable Phone payable Common Shares Retained Earnings What is the Total of all Assets at the end of January as reported in the Balance Sheet? Use accrual accounting. Use accrual accounting between $41.201 and $42,200 more than $42.200 less than $30,000 between $30.001 and $38,100 between $38,101 and $41,200 om/hmtpx- 0.07 19077375876015 1613910515527 Case #4 Lady Leaf and her "Tea experience business Johanna Strauss had worked for more than 25 years as the executive assistant of top managers in large Canadian corporations. After retirement she decided to go on a trip around the world until she gets bored or drops dead. After 20 months in her 'voyage' Johanna decided to return to Toronto due to a complicated health condition. After the initial treatment was completed Johanna needed to have regular check ups and not being confident in herself as before she decided to stay in Toronto all the time. Johanna has been always extremely active and in this new stage of her life she couldn't sit still At this stage she was not interested in working for others as her health made her not very reliable, so she decided to start her own business with a passion she discovered in her 'voyage' prepare and serve tea as it should be done. Her target market or audiences are selected meetings organized by top executives or their partners in their houses On January 1st 2016 Johanna or Lady Leaf as she wanted to be called set up a company to formalize the tea service she has been experiencing with her friends and acquaintances. A friend help her to prepare a business plan that was ready to be presented at her friend's bank so she can get some extra financing if needed in the meantime this friend was so sure about Johanna's idea that decided to lend her $10,000 for 5 years with an interest rate of 3% per year. On January 2nd Johanna sets up her company Tea Experience with a capital of 10,000 shares valued at $5 each A lawyer produced all the rieeded paperwork On January 3rd Johanna opens a bank account under the name of Tea Experience Corp depositing the $10.000 from her plus the $10,000 loaned by her friend. On January 4th Johanna transfers ownership of her sets of tea equipment to the company. All of her tea equipment is high end while one is very rare and exclusive. The equipment has a fair market value of $7,500 and is estimated to last for 5 years and then, if not broken, can be sold for $1.500 She also made sure to transfer the insurance contract for her tea equipment from her to the company as well the contract started on October 1st 2015 The insurance premium is $900 per year and it was paid in full when signed on October 1st 2015 On the same day Johanna signs in for the services of a ride sharing app that would allow her to call a car to go and come back from the places of the customers that hire her The following is a list of transactions that occurred during the first month of operations of "Tea Experience Corp January 4th Completed the purchase of an exquisite wood box fitted to carry and maintain intact the quality of tea leaves for $3,000. The box, which will be paid in full on January 5th 2017 will be used during 5 full years with no resale value at the end January 5th Completed the purchase of an exquisite selection of tea leaves and mixtures for $2,000 50% was paid in cash the other 50% will be paid in 30 days hp January 7th Great start of business serving several events for a large and well known international charity Got a cheque for $3,000 for her services and $2,000 in account to be collected on Jan 31st January 7th Paid $400 of transportation to the ride sharing service January 15th Hired a carpenter to improve the look of her exquisite wood box (this will not change the value or the useful life of the box). The work is completed and Johanna paid $300 on January 20th and promised to pay the rest ($700) on February 20th. January 20th Provided her services for two small events One promised to pay $500 of February 10th, while the other will pay the $500 by the end of February January 20th Provided services in an afternoon event at a local church Johanna collected $200 for all her services January 20th Paid $100 of transportation to the ride sharing service January 23rd Paid for a new professional outfit $80 (clothes) and a hair salon $40 that included labour, materials and tax This was needed so she can be presentable at the high end event she will be providing services on January 25th January 23rd Ordered 300 personal cards and 100 brochures, Total paid for the rush order is $500 ($1 each personal card and $2 each brochurej. Johanna will start distributing them at the high end event of January 25th January 25th One big event was serviced. The bill of $4,000 was paid 50% before the beginning of the event and the rest in 30 days. Johanna was able to distribute 100 personal cards and 20 brochures January 29th Received the bill from the lawyer that helped her to set up the company for $900 payable by February 15th January 30th Received a deposit of $800 for servicing a mid afternoon get together on February 29th. The group wanted to reserve the date to do something special in her house as it only happens once every 4 years January 31st Having consumed 100% of the tea at hand she purchases on account more tea for $1.000 Additional information op or the teu at hand she purchases on account more tea for $1,000. Additional information January 31st The online bank statement for the month of January shows bank fees of $25 January 31st The phone bill for $120 was received for the month of January, the payment is due on February 9th January 31st Johanna does not collect $2,000 from a service provided on Jan 7th Prepare "T" Accounts in ACCRUAL and CASH basis for this case using the following chart of accounts, when relevant, prepare the income statement, Statement of Retained Earnings and Balance Sheet and then answer the questions. Revenue Advertising Expense Bank fees Depreciation Expense Expense on Equipment CGS Insurance Expense interest Expense Phone Expense Purchases Selling Expenses AR Transportation Expense Accumulated Depreciation Cash Organization Costs Prepaid Advertising Inventory Prepaid insurance Tea equipment Tea Equipment (Box) Advances from customers Equipment Payable AP interest Payable Organization Costs PayableLoan Payable Phone payable Common Shares Retained Earnings What is the total of the account Retained Earnings reported in the Balance Sheet at the end January? Use accrual accounting more than $6,000 between $4,001 and $6,000 between $1 and $2.000 (hp using Inventory Prepaid insurance Tea equipment Tea Equipment (Box) Advances from customers Equipment Payable AP Interest Payable Organization Costs Payable Loan Payable Phone payable Common Shares Retained Earnings What is the amount of Bank Fees Expense at the end of January 31 (after AJE? Use accrual accounting between $21 and $30 $0 between $11 and $20 between $1 and $10 O more than $30 32021 McGraw-H l Education. All rights reserved (ip) Interest Payable Phone payable Organization Costs Payable Loan Payable Common Shares Retained Earnings What is the Total of Current Assets at the end of January as reported in the Balance Sheet? Use cash accounting. Use cash accounting between $24,001 and $30,000 between $18,001 and $24,000 less than $10,000 more than $30,000 between $10,001 and $18,000 0 2021 McGraw-Hal Education. All rights reserved COD 050 or 1c o &