File Away is a local Professional Organizing Company, specializing in decluttering your

home, work, and living spaces. They offer consultation, coaching, and hands$-$on

services, as well as provide organizing products like folders, containers, labels,

worksheets, baskets, and more. Services can last anywhere from thirty minutes to eight

hours, with both virtual sessions and in$-$home meetings available. Products are

available online or at the brick$-$and$-$mortar shop located in the Albuquerque Metro area.

The company opened in June $2021$ by owner Lidia File, who was always a neat freak.

She grew up organizing her stuffed animals and begged her parents to buy her plastic

containers to sort the rest of her toys. In college, her friends called her File Cabinet or

File Folder because she was always so organized and had multiple files for all of her

coursework. Now that she has her own business, she$$s looking to expand, but she

needs some help in the accounting department. She$$s enlisted your help to process

some events that have occurred over the last few months and to create some financial

statements that she can take to the bank for a new loan.

Part I

A$.$ Record Transactions

Lidia is looking to open another brick$-$and$-$mortar shop, but is not sure if she has the

funding or the staff to handle another store. Prepare a tabular summary for Lidia of the

following transactions for the months of June, July, and August. Be sure to include

explanations for any revenues or expenses recorded. Include only one totals line at the

end of August $($after recording all transactions$).$ Use the provided templates to complete

your work.

June

$1$ Lidia invested $$10,000$ cash in the business as owner$$s capital

$2$ Paid $$1,200$ cash for June building rent

$3$ Purchased furniture for $$3,300$ cash

$3$ Paid $$650$ for supplies

$4$ Obtains $$20,000$ cash loan from the bank, due in $6$ months plus $6\%$ interest

$5$ Incurred $$250$ of advertising costs in the Albuquerque Journal on account

$7$ Received $$4,700$ in cash from Mr$.$ Ortega for prepaid consulting services

$13$ Paid $$250$ cash for advertising costs incurred on June $5$

$15$ Paid $$2,500$ for merchandise inventory

$17$ Purchased computers for the office for $$1,850$ cash

$22$ Hired two part$-$time employees and agreed to pay them $$15$ an hour for $20$ hours

a week starting in July

$25$ Received $$3,300$ in cash from Ms$.$ Black for prepaid consulting services

$29$ Purchased $$1,200$ merchandise inventory on account

$30$ ADJ: Incurred $$200$ worth of utilities expense to be paid in July

$30$ ADJ: Consulted with Mr$.$ Ortega and earned $50\%$ of his prepayment from June $7$

$30$ ADJ: Counted supplies and only $$400$ worth remains

$30$ ADJ: Incurs one month of interest on bank loan due upon maturity of note

July

$2$ Paid $$1,200$ cash for July building rent

$3$ Paid $$475$ for supplies

$5$ Incurred $$250$ of advertising costs in the Albuquerque Journal on account

$6$ Performed services for Children$$s Preschool for $$2,500$ cash

$7$ Paid $$200$ in utilities from June

$9$ Paid for merchandise inventory purchased on June $29$

$10$ Sold merchandise inventory costing $$800$ to the local sorority house for $$1,300$

cash

$11$ Sold $$700$ worth of merchandise inventory to Bob$$s Auto Parts for $$1,200$ on

account

$13$ Paid $$250$ cash for advertising costs incurred on July $5$

$15$ Paid $$4,000$ for merchandise inventory

$15$ Paid both employees for two weeks of work each

$21$ Received $$4,250$ in cash from Team Adventures for prepaid consulting services

$24$ Performed services for Mini Brick Fun, Inc. for $$1,200$ cash.

$24$ Sold Mini Brick Fun, Inc. merchandise inventory worth $$1,200$ for $$1,700$ cash to

help organize their mini bricks

$25$ Lidia made a $$650$ owner$$s withdrawal

$26$ Performed the rest of the consulting services for Mr$.$ Ortega

$28$ Performed $75\%$ of services for Ms$.$ Black from her June $25$ prepayment

$30$ Paid both employees for two weeks of work each

$31$ ADJ: Incurred $$200$ worth of utilities expense to be paid in August

$31$ ADJ: Consulted with Team Adventures and earned $20\%$ of their prepayment from

July $21$

$31$ ADJ: Counted supplies and only $$325$ worth remains

$31$ ADJ: Incurs one month of interest on bank loan due upon maturity of note

August

$1$ Mini Brick Fun, Inc. returned merchandise inventory for $$600$ cash back. The

cost is $$100$ and the merchandise is put back into the inventory room to be sold

to another customer

$2$ Paid $$1,200$ cash for August building rent

$3$ Paid $$1,500$ for supplies

$5$ Incurred $$250$ of advertising costs in the Albuquerque Journal on account

$6$ Performed services for House Decor for $$4,800$ on account

$7$ Paid $$200$ in utilities from July

$9$ Purchased $$5,000$ of merchandise inventory on account

$10$ Sold merchandise inventory costing $$3,700$ to the House Decor for $$4,200$ cash

$10$ Received payment from House D$$cor for services provided on August $6$

$13$ Paid $$250$ cash for advertising costs incurred on August $5$

$14$ Paid both employees for two weeks of work each. Hired a third employee to start

immediately at same pay rate and