Dear Accountant, Help me compare and make the right decision better by answering the following question below:
Problems: 2. The Accounting Information System (20 points) The following information pertains to Doreen's Burritos, Inc.: January 1* a. Finance with $200,000; $20,000 is contributed by Doreen (in exchange for 1,000 shares of common stock - 100% ownership) and $180,000 is borrowed, long-term (with a 'balloon' repayment due in 3 years) from a bank at 5%, due annually. b. Buy equipment, which you think will last 6 years, for $72,000, in cash. c. Sign a 2-year store lease and pay a $5,000 security deposit and $12,000 for January - March rent, both in cash. d. Pre-pay a $12,000 annual premium for a property / liability insurance policy, in cash. e. Acquire $80,000 of inventory from food suppliers on credit, payment due in 60 days. January 15 through January 31 1. Sell 70% of the inventory for $80,000 (with a cost of $56,000), receiving $73,000 in cash and the rest is due within 30 days. 2. Pay $50,000 of the accounts payable for the inventory acquired in step e) above. 3. Acquire $60,000 of additional food inventory on credit, payment due in 60 days. 4. Collect $2,000 of accounts receivable from customers from step 1) above. 5. Pay $6,000 in salaries, in cash, for the period from January 1 to January 28 (4 weeks). quired: . Provide journal entries for the 'explicit' 10 transactions. Provide the necessary "adjusting" journal entries as of January 31 so that the resulting financial statements are on an "accrual" basis, in accordance with U.S. GAAP and IFRS - Provide the Income Statement for the month of January (i.e., ending January 31). . Provide the Balance Sheet as of January 31*. - What is Operating Cash Flow for the month of January (i.e., ending January 31")? Problems: 2. The Accounting Information System (20 points) The following information pertains to Doreen's Burritos, Inc.: January 1* a. Finance with $200,000; $20,000 is contributed by Doreen (in exchange for 1,000 shares of common stock - 100% ownership) and $180,000 is borrowed, long-term (with a 'balloon' repayment due in 3 years) from a bank at 5%, due annually. b. Buy equipment, which you think will last 6 years, for $72,000, in cash. c. Sign a 2-year store lease and pay a $5,000 security deposit and $12,000 for January - March rent, both in cash. d. Pre-pay a $12,000 annual premium for a property / liability insurance policy, in cash. e. Acquire $80,000 of inventory from food suppliers on credit, payment due in 60 days. January 15 through January 31 1. Sell 70% of the inventory for $80,000 (with a cost of $56,000), receiving $73,000 in cash and the rest is due within 30 days. 2. Pay $50,000 of the accounts payable for the inventory acquired in step e) above. 3. Acquire $60,000 of additional food inventory on credit, payment due in 60 days. 4. Collect $2,000 of accounts receivable from customers from step 1) above. 5. Pay $6,000 in salaries, in cash, for the period from January 1 to January 28 (4 weeks). quired: . Provide journal entries for the 'explicit' 10 transactions. Provide the necessary "adjusting" journal entries as of January 31 so that the resulting financial statements are on an "accrual" basis, in accordance with U.S. GAAP and IFRS - Provide the Income Statement for the month of January (i.e., ending January 31). . Provide the Balance Sheet as of January 31*. - What is Operating Cash Flow for the month of January (i.e., ending January 31")
