Case Study: JJ Cakes JJ Cakes began operating on January 1 2018. They are a specialist cake maker. The premises they occupy are rented and they signed a five year lease with a prepayment of the first three months and half a months rent as a damage deposit. The rent is $2,000 per month and includes all utilities. The owner, JJ, started the business with $25,000 she received on her 30th birthday from her great aunt. She is very excited about starting her business and has lined up her first client who wants a wedding cake for a March 1st wedding. The client has paid a $400 deposit for this custom $1,200 three tier cake. Before the business opened, JJ spent $5,000 cash on a new oven ($2,500), a display case ($600), furniture for the store front ($1,100) and a backlit sign for the front of the store ($800). JJ also purchased $1,500 of supplies on account from a local company, with a 90 day credit policy. There is an annual insurance policy required by the landlord, which JJ purchased on January 1 for $1,800. JJ expects clients to book cakes from day one so has hired a friend, Amy, to work the front of store at $15/hr for a 40hr week. She also went ahead and ordered $700 worth of inventory to be delivered on January 10th and every two weeks after that. The inventory is on account and payment is expected within 30 days. At January 31st, JJ Cakes has sold and produced 4 custom cakes, details as followed: 1. $900 cake, ordered January 3rd, delivered January 11th, paid cash on delivery 2. $2,000 cake, ordered January 5th, delivered January 12th, paid cash January 15th 3. $1,500 cake, ordered January 9th, delivered January 13th, paid cash on delivery 4. $2,500 cake, ordered January 18th, delivered January 30, balance outstanding For cake #4, the customer still has a week to pay per the terms of the contract. There is $150 of inventory left in the stock room. The employee has worked 24 hours in the last week of January, as well as four full weeks of work. She is paid every two weeks at the end of the second week worked. JJ is not drawing a salary. JJ does not pay her accounts payable until the due date as part of her cash management system. JJ calculates her inventory on a periodic basis at the end of each month JJ has asked you to help her with her accounting for the first three months of business while she figures out the logistics of it. You are happy to do this, but want to make sure that everything is recorded promptly and accurately to ensure JJ has the correct groundwork for understanding her business.

prepare the trial balance.