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Chapter 2 Processing Accounting Information SERIAL PROBLEM: KATE'S CARDS (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapter SP2. In September 2016, Kate incorporated Kate's Cards after investigating different or and hegan the process of getting her business up and running. The following events atio 1. Kate deposited $10,000 that she had saved into a newly opened business checkine the month of September 2016 received common stock in exchange 2. Kate designed a brochure that she will use to promote her greeting cards at local stati 3. Kate paid Fred Simmons $50 to critique her brochure before undertaking her final desion design and printing. Kate purchased a new iMac computer tablet, specialized graphic arts software, and printer for the company, paying $4,800 in cash. She decided to record all of these i items under the same equipment account. 5. Kate purchased supplies such as paper and ink for $350 at the local stationery store. She opened business account with the store and was granted 30 days credit on all purchases,including the on she just made. 6. Kate designed her first 5 cards and prepared to show them to potential customers. 7. The owner of the stationery store where Kate opened her account was impressed with Kate's work and ordered 1,000 of each of the five card designs at a cost of $1 per card, or $5,000 total. Kate tells the customer that she will have them printed and delivered within the week. 8. Kate purchased additional supplies, on account, in the amount of $1,500. 9. Kate delivered the 5,000 cards. Because the owner knows that Kate is just starting out, he paid he immediately in cash. He informed her that if the cards sell well that he will be ordering more, bu would expect a 30-day credit period like the one he grants to his own business customers The cost to Kate for the order was $1,750 of the supplies she had purchased. (Hint: This cost should be recorded as a debit to an expense called Cost of Goods Sold.) 10. I1. Kate paid her balance due for the supplies in full. 12. Kate decided that she should have special renters' insurance to cover the business equipment she Two accounts will need to be debited here, one for the current month expense and one for the amount in cash. (Hint: prepaid amount.) 13. Kate determined that all of her equipment will have a useful life of 4 years (48 months) at which ot have any resale or scrap value. (Hint: Kate will expense 1/48th of the cost of the equipment each montoDepi iation Expense. The credit will be to Accumulated Depreciation.) 14. Kate paid herself a salary of $1,000 for the month. Reguired Prepare a general ledger with the following accounts: Cash: Accounts Receivable: S ventory; Prepaid Insurance; Equipment; Accumulated Depreciation: A Stock: Re