Question
Miss Odette opened a souvenir store called The Souverinette on November 1, 2021. She uses the perpetual inventory system. The following were the transactions during
Miss Odette opened a souvenir store called "The Souverinette" on November 1, 2021. She uses the perpetual inventory system. The following were the transactions during the period:
November 1: Provided 50,000 cash as initial investment to the business.
Acquired equipment for 36,000 cash.
The equipment has a useful life of 4 years.
Paid a one-year insurance premium of 12,000. (Use asset method.)
November 12: Purchased inventory costing 15,000 for cash.
November 14: Sold goods for 15,000 cash. The cost of sales is 2,000.
December 1: Sold goods with sales price of 12,000 in exchange for a 12,000, 10%, one-year note receivable. Principal and interest are due at maturity. The cost of sales is 1,500.
December 5: Purchased inventory for 2,000 on account.
December 26: Sold goods for 17,000 on account. The cost of sales is 3,000.
December 27: Paid 1,000 account payable.
December 29: Collected 10,000 account receivable.
Additional information:
The following information was identified on December 31, 2021:
a) Of the total accounts receivable, 1,000 is doubtful of collection.
b) Salaries earned by employees during the period but were not yet paid amounted to 10,000.
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>>>Tutors please: 1. Prepare the balance sheet and income statement of The Souvenirette as of and for the two months ended December 31, 2021, respectively. Note: The two statements should be prepared based on the post-closing trial balance. 2. Prepare a statement of changes in owners' equity.
Will mark as helpful if done correctly thank you so much!
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