!.:g._. |||Normal 11No Spac Heading 1 Heading 2 Paragraph urvey of Accounting Class 13 Packet Semester Case- My Assistant, Inc,/Cowboy Ice Cream, Inc. W.T.finaly made the decision to sel My Assistant, Inc. and did so in December. With the cath he realized from the sale, he l be investing in a different business, Cowboy Ice Cream, Inc. (CIC. W.T.'s aunt will also be investing in the business. CIC sells unique flavors of premium ice cream on a wholesale basis and also operates an ice cream truck duing the warmer months. CIC was orginally started by one of his My Assistant clients, Frank Boardman, and has previously been operated as a sole proprietorship, Frank is a successful entrepreneur who runs o number of businesses, ncluding CiC. Unfortunately, he hain't had enough time to devote to CIC and doesn't believe it's been able to realize its ful potential Although W.T. and his aunt initialy corsidered buying CIC outright, they decided that Frank:s knowedge and experience wa prove useful in running the business and have instead convinoed him to become a shareholder of the new company rather than seling the business to them. Although W.T. and his aunt wl both contribute cash to acquire their stook, Frank w contribute land and inventory. On January 1, 2018, their new business was formed In January, CIC ill only operate the wholesale portion of its business as it's foo cold to generate much business by operating an ice cream truck (which is rented seasonally). For the wholesale portion of its business, CIC places orders with its mandoctuner, stores its product (half galors of ce aream) in cold storage twhich it rents), and diatributes its produot to grocery stores through the delivery service offered by the oold storage faolity. Becouse CiC pays its manufoaturer actual costs to produce its produat (rather than a fecd over time. W.T. is the only employee of CIC at this ime and he business, CIC applies the FFO cost flow assumption to its inventory do fend to fuctuate al aspects of the During Januory, the business experienced the folowing events 1. Acquired $50,000 cash $5,000 of inventory (1,250 units), and $20,000 of land from the asue of oommon stock 2. Purchased 1,000 units of ice orearn af $4.50 each, on account 3. Sold 1,500 urits of ice cream at $8.00 each, on account 4. Paid the storage and delivery bill for the month, $1,300 5. Paid w.. wages of S500. 6. Received $7,000 from austomers on acoount, 7. Paid the manufacturer $3,000 of the amount owed. Required: a. Record these events in a horzontal statements model like the one on p. 5. An Exce template is aso provided on Brightspace. b. Compute the amount of ending Inventory CIC would report on the January balance o Compute the gross margin CIC would report on its January inoome statement d. Compute the net inoome CIC would report on its inoome statement SuDlte Subtle Em... Emphasis Se Styles Ed Survey of Accounting Class 13 Packet e. What is the balance in accounts receivable at the end of the month? f. What is the balance in accounts payable at the end of the month? 9 Compute the amount of net cash flow from operating activities h, why are net roome and retained earnings the same for CC Survey of Accounting Class 13 Packet Bolance Sheet trot of Cash flows ncome Statement Assets UobStookholders Events Ret. Ea Revenue Expense Net Income Inv Beg Bal 30 3b End Bal
