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Kaylee James opened Kaylees Sweets on January 1, 2016. The shop specializes in a selection of gourmet chocolate candies and a line of gourmet ice
Kaylee James opened Kaylees Sweets on January 1, 2016. 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 stores financial records. The following transactions occurred in February, the first month of operations.
- Received four shareholders contributions totaling $30,200 cash to form the corporation; issued 400 shares of $0.10 par value common stock.
- Paid three months rent for the store at $1,750 per month (two months are prepaid).
- Purchased and received candy for $6,000 on account, due in 60 days.
- Purchased supplies for $1,560 cash.
- Negotiated and signed a two-year $11,000 loan at the bank, receiving cash at the time.
- Used the money from (e) to purchase a computer for $2,750; used the balance for furniture and fixtures for the store.
- Placed a grand opening advertisement in the local paper for $400 cash; the ad ran in the current month.
- Made sales the first two weeks totaling $3,500; $2,675 was in cash and the rest on accounts receivable. The cost of the candy sold was $1,600.
- Made a $550 payment on accounts payable.
- Incurred and paid employee wages of $1,300.
- Collected accounts receivable of $600 from customers.
- Made a repair to one of the display cases for $400 cash.
- Made cash sales of $1,200 for the rest of the month. The cost of the candy sold was $600.
Required
- Record journal entries for each of the transactions.
- Prepare an income statement at the end of the first month of operations ended January 31.
- Prepare a balance sheet as of January 31.
Year | 2016 | 2017 | 2018 |
Total Assets | $52,500 | $58,500 | $66,000 |
Total Liabilities | 18,500 | 22,000 | 27,500 |
Total Equity | 34,000 | 36,500 | 38,500 |
Sales Revenue | 55,000 | 82,500 | 93,500 |
Net Income | 4,400 | 11,000 | 22,000 |
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