Daymond John grew up in the heart of hip-hop culture: Hollis, Queens. In his early 20s, as many of you, he was working as a waiter at the restaurant (Red Lobster) and trying to figure out how to start a business. Eventually, he stumbled on the idea of making clothes for fans of rap music. In 1992, he started FUBU (For Us By Us) and began selling hats outside of a local mall. Three years later, FUBU was bringing in $350 million in sales. Later he was a judge on Shark Tank, and he is a motivational speaker and author. After the trading show in Las Vegas Daymond John signed $300,000 worth of orders from retailers. Let's assume that Daymond followed US Generally Accounting Principles for his business. What journal entry did FUBU make on the day the contracts were signed? Balance Sheet Income Statements Assels Liabilities Stockholders' Equity Revenue Expense Net Income Options Cash Accounts receivables = Accounts payable + Unearned revenue + Common Stock + Retained earnings = A 300.000 + E + 300,000 + + B 300 000 300,000 300,000 300,000 C 300.000 300,000 D Nothing, signing the contract does not constitute an accounting transaction After 27 rejections for loans, John family took equity loan on their house $100,000 and put the money into the business. Debt financing was recorded in the following manner: Assels Liabilities Stockholders' Equity Revenue Expense Net Income Options Cash t Accounts receivables Accounts payable + Notes Payables + Common Stock + Retained earnings A 100,000+ + + 100,000 + B 100,000+ (100,000) = + + + 100,000 = C 100,000+ + 100.000 + + D 100,000+ = 100,000+ + Option A O Option B Option C O Option D After transferring his house into "mini factory" Daymond and his team were able to fulfill $75,000 worth of orders, that means $75,000 worth of apparel were shipped to the retailers. Daymond also mentioned that "it took 30,60, 90 days" for stores to pay FUBU. That is typical for B to B (Business to Business) to operate on credit. What journal entry did FUBU make on the day it shipped $75,000 worth of apparel to retailers? Assels Options Cash + Accounts receivables Accounts payable + Liabilities Stockholders' Equity Revenue Expense Net Incom Unearned + revenue Common Stock + Retained earnings A 75,000 + + 75.000 + B + 75,000 + + +75,000 75.000 75,000 C + 75,000 = + 75,000 + = D 75.000 + + + 75.000 75,000 = 75,000 O Option A: Increase in Cash and Unearned revenue Option B: Increase in Accounts receivable and Revenue Option C:Increase in Accounts receivables and Unearned revenue Option D: Increase in Accounts Payable and Revenue pts Assume, that one of the retailers that received FUBU apparel mentioned in question 3 just paid for $30,000 worth of the apparel to FUBU. On that payment receipt day FUBU recorded: Assets Liabilities Stockholders' Equity Revenue Expense Net Income Options Cash + Accounts receivables Accounts payable Unearned Common + + revenue Stock Retained earnings A 30,000+ B 30,000 + ++ 30,000 (30,000) + + E + + + C 30,000 + 30,000 + + + 30,000 D 30,000 + (30,000) = + + + 30,000 N 30,000 30,000 Option A Option B O Option C Option D Daymond John mentioned that in order to find strategic partner he paid $2,000 for a classified advertisement in the local (NY) newspaper. Assume that he paid for ad in December and the advertisement appeared in the newspaper in January of the next year. What journal entry FUBU recorded in December? Assets Liabilities Stockholders' Equity Revenue Expense Mat Income Options Cash + Prepaid advertisamant Accounts Payable Unearned revenue Common Stock Retained earnings A (2,000) D (2,000) + ++ 2,000 = + C (2,000) + D (2.000) + + 2,000 2,000 + + + (2.000) 2,000 2,000 + + + (2,000) (2.000) Option A Option B Option C Daymond John mentioned that in order to find strategic partner he paid $2,000 for a classified advertisement in the local (NY) newspaper. Assume that he paid for ad in December and the advertisement appeared in the newspaper in January of the next year. What journal entry did FUBU make when it recognized Advertisement expense in January? Assets Liabilities Unearned revenue + + Stock Options Cash + Prepaid advertisement Accounts payable A + 2,000 + B + (2,000) C + (2,000) D (2,000) + (2.000) + + O Option A O Option B O Option C Option D Me Stockholders' Equity Revenue -Expense Income Common Retained earnings + 2,000 (2,000) 2,000 (2,000) 2.000 2,000 (2,000)