Case Study

Rhy$$s Fries $$ Part $5$

July $2,20$X$1$

After seeing an advertisement on a local billboard about an upcoming outdoor carnival Ronald got an idea about what to do next. He$$ll take his food truck on the summer carnival circuit. He$$s done some basic research and estimates that he will be able to attend at least $10$ different events between now and the end of September. He knows this will be difficult work, more difficult than he can do on his own, so he sets out to find some help.

On July $4$th$,$ he posted a help wanted ad on a local job website. The cost for the ad was $$200$ plus GST for a weekend posting $($paid by cash$).$ The response wasn$$t overly great, but he did find a passionate and experienced individual that knows the carnival circuit; Peter Crandle. Ronald has agreed to pay Peter a $$5,300$ per month salary as well as cover off any necessary travel expenses that come up during their tour of the circuit. Peter starts work on July $8$th but because of the short notice Ronald has agreed to pay Peter his full monthly salary for the month of July $($payment date of July $31).$ Ronald also paid the hiring agency the amounts owing from the worker required for Oilmaggedon.

July $12,20$X$1$

The adventure begins! Having only a couple of days to prepare, Ronald and Peter get set to begin their tour of the carnival circuit. Though feeling a little unprepared for the challenges that may lie ahead Ronald soothed his nerves with an informative conversation with Uncle Bob who provided a handy spreadsheet to help keep track of the revenues and expenses. The spreadsheet allows Ronald to list out the dates and locations of his sales as well as the related expenses for those events. Bob told Ronald to come back at the end of the month to get his financial statements prepared.

July $31,20$X$1$

It$$s been a whirlwind couple of weeks for Ronald and Peter. Though there were many long days of selling followed by even longer nights travelling to the next destination, Ronald did manage to find time to complete the spreadsheet that Bob gave him $($Appendix $1).$ With the spreadsheet in hand, Ronald went to see his uncle. He also declared and paid himself a dividend of $$5,000$ for his hard work over the past couple of months.

$5$a$.)$ Complete any journal and adjusting entries required for the month of July $20$X$1.$ Be sure to include the journal entries required from Appendix $1.$

$5$b$.)$ Using the year to date balances in the various accounts utilized up to this point, complete an adjusted trial balance, multi$-$step income statement, statement of changes in equity and statement of financial position for the quarter ended July $31,20$X$1.$