In-Class Accounting Exercise January 1, 2012 1. Invest $5 of your own cash in the business 2. Take out a $100 loan from a bank 3. Prepay $3 for a 3-month insurance policy January 2, 2012 4. Your friend pre-pays you $2 for two glasses of lemonade 5. You buy $4 of inventory on credit and $20 of inventory for cash a. This can make 48 glasses b. So, cost is.50 per glass 6. You buy a $36 lemonade stand for cash January 3 - 30 7. You give your friend the two glasses of lemonade 8. You sell 30 glasses of Lemonade at $1 a glass a. 10 glasses are on credit b. 20 glasses for cash January 31 9. Record an insurance expense 10. Record depreciation expense using straight line depreciation 11. Pay $10 of principle and $1 of interest on loan 12. Calculate month-end income statement and balance sheet TRANSACTION 6 1 2 3 4 5 7 8 9 10 6/30/2019 75000 60000 -14400 mmm.. QUESTION 1 Line 1 BALANCE SHEET 2 ASSETS 3 Cash 4 Accounts Receivable 5 Inventory 6 Prepaids 7 8 Equipment 9 Accumulated deprection 10 Net equipment (8+9) 11 12 TOTAL ASSETS (3+4+5+6+10) 13 14 LIABILITIES + OWNERS EQUITY 15 Accounts Payable 16 Accruals 17 Notes Payable 18 TOTAL LIABILITIES (15+16+17) 19 20 Original Investment 21 Retained Earnings 22 OWNERS EQUITY (20+21) 23 24 TOTAL LIABILTIES + OE (18+22) 25 26 CHECK: 27 28 29 INCOME STATEMENT 30 Sales 31 Cost of Goods Sold 32 Gross Profit (30-31) 33 34 Depreciation Expense 35 Other expenses 36 37 Net Income (32-34-35) 0 0 0 O 0 0 0 0 0 0 0 In-Class Accounting Exercise January 1, 2012 1. Invest $5 of your own cash in the business 2. Take out a $100 loan from a bank 3. Prepay $3 for a 3-month insurance policy January 2, 2012 4. Your friend pre-pays you $2 for two glasses of lemonade 5. You buy $4 of inventory on credit and $20 of inventory for cash a. This can make 48 glasses b. So, cost is.50 per glass 6. You buy a $36 lemonade stand for cash January 3 - 30 7. You give your friend the two glasses of lemonade 8. You sell 30 glasses of Lemonade at $1 a glass a. 10 glasses are on credit b. 20 glasses for cash January 31 9. Record an insurance expense 10. Record depreciation expense using straight line depreciation 11. Pay $10 of principle and $1 of interest on loan 12. Calculate month-end income statement and balance sheet TRANSACTION 6 1 2 3 4 5 7 8 9 10 6/30/2019 75000 60000 -14400 mmm.. QUESTION 1 Line 1 BALANCE SHEET 2 ASSETS 3 Cash 4 Accounts Receivable 5 Inventory 6 Prepaids 7 8 Equipment 9 Accumulated deprection 10 Net equipment (8+9) 11 12 TOTAL ASSETS (3+4+5+6+10) 13 14 LIABILITIES + OWNERS EQUITY 15 Accounts Payable 16 Accruals 17 Notes Payable 18 TOTAL LIABILITIES (15+16+17) 19 20 Original Investment 21 Retained Earnings 22 OWNERS EQUITY (20+21) 23 24 TOTAL LIABILTIES + OE (18+22) 25 26 CHECK: 27 28 29 INCOME STATEMENT 30 Sales 31 Cost of Goods Sold 32 Gross Profit (30-31) 33 34 Depreciation Expense 35 Other expenses 36 37 Net Income (32-34-35) 0 0 0 O 0 0 0 0 0 0 0
