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Kaylee James, a connoisseur of fine chocolate, opened Kaylee's Sweets in Collegetown on February 1. The shop specializes in a selection of gourmet chocolate candies
Kaylee James, a connoisseur of fine chocolate, opened Kaylee's Sweets in Collegetown on February 1. The shop specializes in a selection of gourmet chocolate candies and a line of gourmet ice cream. You have been hired as manager. Your duties include maintaining the store's financial records. The following transactions occurred in February, the first month of operations.
- Received four shareholders' contributions totaling $27,900 cash to form the corporation; issued 300 shares of $0.10 par value common stock.
- Paid three months' rent for the store at $1,870 per month (recorded as prepaid expenses).
- Purchased and received candy inventory for $5,600 on account, due in 60 days.
- Purchased supplies for $1,330 cash.
- Negotiated and signed a two-year $18,000 loan at the bank, receiving cash at the time.
- Used the money from (e) to purchase a computer for $3,300 (for recordkeeping and inventory tracking); used the balance for furniture and fixtures for the store.
- Placed a grand opening advertisement in the local paper for $480 cash; the ad ran in the current month.
- Made sales on Valentine's Day totaling $3,600; $2,695 was in cash and the rest on accounts receivable.
- The cost of the candy sold in (h) above was $1,800. (Reminder: Used inventory is an expense called Cost of Goods Sold.)
- Made a $560 payment on accounts payable.
- Incurred and paid employee wages of $1,600.
- Collected accounts receivable of $115 from customers.
- Made a repair to one of the display cases for $135 cash.
- Made cash sales of $2,700 during the rest of the month.
- The cost of the candy sold in (n) above was $1,510.
Required:
1 and 2. Record in the T-accounts the effects of each transaction for Kaylees Sweets in February, referencing each transaction in the accounts with the transaction letter.
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