need help with the income statement
Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European mixers. The owner of Kinski Supply Co. has approached Natalie to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily Identified Natalie asks you the following questions 1. "Would you consider these mixers to be inventory or should they be classified as supplies or equipment? *Tve learned a little about keeping track of inventory using both the perpetuat and the periodic systems of accounting for inventory Which system do you think is better? Which one would you recommend for the type of inventory that I want to selly "How often do I need to count inventory ift maintain it using the perpetual system? Do I need to count inventory at allir 2 3 350 The trial balance for cookle creations as on December 31, 2018 is as follows COOKIE CREATIONS Post-Closing Trial Balance December 31, 2018 Account Debit Credit Cash $1.180 Accounts Receivable 875 Supplies Prepaid Insurance 1.210 Equipment 1.200 Accumulated Depreciation Equipment $40 Accounts Payable Sataries and Wages Payable 56 Untamed Service Revenue Interest Payable Notes Payable 2.000 Common Stock 800 75 300 15 Retained Earnings 1.529 54,815 $4.815 In the end, Natalie decides to use the perpetual inventory system. The following transactions happen during the month of January Jan 4 Bought five deluxe mixers on account from Kzinski Supply Co. for $2.875 FOB shipping point terms 1/30 In the end, Natalie decides to use the perpetual inventory system. The following transactions happen during the month of January 7 8 12 Jan. 4 Bought five deluxe mixers on account from Kzinski Supply Co. for $2,875, FOB shipping point, terms /30. 6 Paid $100 freight on the January 4 purchase. Returned one of the mixers to Kzinski because it was damaged during shipping, Kzinski issues Cookie Creations credit for the cost of mixer plus $20 for the cost of freight that was paid on January 6 for one mixer. Collected $375 of the accounts receivable from December 2018. Three deluxe mixers are sold on account for $3,450, FOB destination, terms n/30. (Cost of goods sold is $595 per mixer.) 14 Paid the $75 of delivery charges for the three mixers that were sold on January 12. Bought four deluxe mixers on account from Kzinski Supply Co. for $2,300, FOB shipping point, terms /30. Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an additional $1.000 cash in Cookie Creations in exchange for common stock Paid $80 freight on the January 14 purchase. Sold two deluxe mixers for $2,300 cash. (Cost of goods sold is $595 per mixer.) Natalie issued a check to her assistant for all the help the assistant has given her during the month. Her assistant worked 20 hours in January and is also paid the $56 owed at December 31, 2018. (Natalie's assistant earns $8 an hour.) Collected the amounts due from customers for the January 12 transaction Paid a $145 utility bill($75 for the December 2018 accounts payable and $70 for the month of January). 14 17 18 20 28 28 30 31 Paid Kzinski all amounts due. 31 Cash dividends of $750 are paid. Prepare the January 2019 transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually . If no entry is required, select "No Entry for the account titles and enter for the amounts Record entries in the order displayed in the problem statement) Date Account Titles and Explanation Debit Credit Jana Inventory 2.875 Accounts Payable 27 Jan V Inventory 100 Cash Jan Accounts Payable 595 Inventory 59 Jana V Cash 375 Accounts Receivable 37 Jan 12 Accounts Receivable 3.450 Sales Rever 3.45 (To record sales revenue) Jan. 12 Cost of Goods Sold 1785 Inventory TI 17 (To record cost of goods sold) Jan 14 V Freight-Out 75 Cash (To record delivery charges pald) Jan. 14 Inventory 2.300 Accounts Payable (To record purchases made 230 To record pur Jan 17 1000 LDO Common Stock Jan 18 V Inventory Cash Jan 20 Cash 2.300 2.30 Sales Revue (To record sales revenue Cast of Goods Sold Jan 20 > 110 Inventory 119 (To record cost cost of goods sold Salaries and Wages Experie Jan 28 10 Salaries and Wages Payable 56 Cach 21 (To record salaries and wages paid) Jan 25 Cash 3.450 Accounts Receivable 245 To record amount collected from customers) Jan. 30 Utilities Expense 20 Accounts Payable 75 Cash Jan 31 V Accounts Payable 580 Cash To record payment made to creditor) Jan 33 Dividends 250 Your Answer Correct Answer (Used) Post the January 2019 transactions. (Post entries in the order of journal entries presented in the previous part. If balance after calculations is then please enter 0. Enter other answers in Debit and Credit columns in relevant fields only weather fields blank) Cash Date Explanation Ref. Debit Credit Balance Jan Balance 10 Juno J1 100 1000 Jan V 31 375 1455 Jan. 14 31 L380 Jan 17 J1 1.000 2380 Jan. 18 31 2.300 Jan 20 V 31 2.300 4.600 Jan 28 JI 216 4384 Jan 28 31 1450 7834 Jan 30 J1 145 760 Jan 31 31 4.580 1109 Jan 31 31 750 2.159 Accounts Receivable Date Explanation Ref. Debit Credit Balance Jan 1 V Balance 75 Jana V JI 375 500 Jan 12 1 1450 1950 Jan 28 11 1450 Inventory 500 Date Explanation Ref. Debit Credit Balance Inventory Date Explanation Ref. Debit Credit Balance Jana J1 2.875 2575 Jan 6 J1 100 2.975 Jan. V JI 595 2.380 Jan 12 V 31 1.785 595 Jan 14 7 31 2.300 2.895 Jan. 18 V 31 80 2.975 Jan 20 31 1.190 1.785 Supplies Date Explanation Ref. Debit Credit Balance Jan 1 Balance 350 Prepaid Insurance Date Explanation Ref. Debit Credit Balance Jan 1 Balance 1210 Equipment Date Explanation Ref. Debit Credit Balance Jan 1 Balance T.200 Accumulated Depreciation Equipment Date Explanation Ref. Debit Credit Balance Jin. 1 Balance 40 Accounts Payable Date Explanation Ref. Debit Credit Balance Balance 75 Jan 4 JI 275 2.950 Jon 505 2.355 Accounts Payable Date Explanation Ref. Debit Credit Balance Jan 1 Balance 75 Jan 4 31 2975 2.950 Jan 7 31 595 2355 Jan 14 7 31 2.300 4655 Jan 30 31 75 4580 Jan 317 31 Salaries and Wage Payable Date Explanation Ref. Debit Credit Balance Jan 1 Balance 56 Jan 28 31 0 Unearned Service Revenue Date Explanation Ref. Debit Credit Balance Jant Balance 300 Interest Payable Date Explanation Ref. Debit Credit Balance Jan 1 Balance 15 Notes Payable Date Explanation Ref. Debit Credit Balance Jon: 1 Balance 2000 Common Stock Date Explanation Ref. Debit Credit Balance Jan 1 Balance 300 Jan 17 1000 11800 Retained Earnings Date Explanation Ref. Debit Credit Balance uestion 4 of 13.10. = Debit Credit Balance Retained Earnings Date Explanation Ref. Jan 1 Balance Dividends Date Explanation Ref. 1.529 Debit Credit Balance Jan 31 31 750 750 Sales Revenue Date Explanation Ref. Debit Credit Balance Jan 12 V 31 3.450 3450 Jan. 20 31 2.300 5.750 Cost of Goods Sold Date Explanation Ref. Debit Credit Balance Jan 12 J1 1.785 1785 Jan 20 31 2.190 2.975 Salaries and Wages Expense Date Explanation Ref. Debit Credit Balance Jan 28 J1 160 160 Utilities Expense Date Explanation Ref. Debit Credit Balance Jan 30 31 70 20 Freight-Out Date Explanation Ref. Debit Credit Balance Jan 14 J1 75 75 Prepare a trial balance. (Do not list those accounts that have zero ending balance) Cookie Creations Trial Balance January 31, 2019 Debit Credit Cash 2359 500 Accounts Receivable Inventory 1785 Supplies 350 Prepaid Insurance 1210 Equipment 1200 Accumulated Depreciation Equipment 40 Uneared Service Revenue 300 Interest Payable 15 Notes Payable 2000 Common Stock 1800 Retained Eaming 1529 Dividends 750 Sales Revenue 5750 Cost of Goods Sold 2975 Salaries and Wages Expense 160 Utilities Expert ILUMO 70 Freight-Out 25 Totals 11434 As of January 31, the following adjusting entry data are available. 1 2 3 4 A count of baking supplies reveals that none were used in January Another month's worth of depreciation needs to be recorded on the $1.200 of baking equipment bought in November (Recall that the baking equipment has a useful life of 5 years or 60 months and no salvage value) An additional month's worth of interest on her grandmother's $2.000 loan needs to be accrued. (The interest rate is 6%) During the month. $110 of insurance has expired. An analysis of the unearned service revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result, there is no change to the unearned service revenue account. Natalie hopes to complete the remaining lessons in February An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining 5 Prepare the adjustinguinal entries required. (Credit account titles are automatically indented when amount is entered. Do not indent manually . If no entry is requlred, select "No Entry" for the account titles and enter for the amounts) Account Titles and Explanation Debit Credit No Entry No. Date 1. Ian 31 No Entry Jan 31 Depreciation Expono Accumulated Depreciation Equipment 3 Jan 31 V Interest Expense Interest Payable Jan trance Expense 110 Prepaid Imrance 5. Jan 31 No Entry NE 6 Jan 31 NE Your answer is correct Post the adjusting journal entries required. Cash Date Explanation Ref. Debit Credit Balance Jan. 1 Balance 1.180 J1 100 1.080 8 31 375 1.455 14 J1 75 1.380 17 31 1.000 2,380 18 31 80 2.300 20 31 2.300 4.600 28 J1 216 4.384 28 31 3.450 7,834 30 31 145 7.689 31 31 4.580 3.109 31 31 750 2.359 Accounts Receivable Date Explanation Ref. Debit Credit Balance Jan. 1 Balance 875 8 01 375 500 12 31 3,450 3.950 28 J1 3.450 500 Inventory Date Explanation Ref. Debit Credit Balance Jan. 4 31 2.875 2.875 6 31 100 2.975 7 31 595 12 2,380 31 1.785 14 595 21 2.300 18 2.895 31 80 2.975 Inventory Date Explanation Ref. Debit Credit Balance Jan. 4 31 2875 2.875 6 JI 100 2.975 7 31 595 2380 12 31 1785 595 14 31 2.300 2.895 18 31 80 2.975 20 JI 1.190 1.785 Ref. Debit Credit Balance Supplies Date Explanation Jan. 1 Bal.ce Prepaid Insurance Date Explanation Jan. 1 Balance 350 Ref. Debit Credit Balance 1.210 Jan. 317 Adjusting 32 150 1100 Equipment Date Explanation Ref. Debit Credit Balance 1.200 Jan 1 Balance Accumulated Depreciation- Equipment Date Explanation Ref. Debit Credit Balance Jan. 1 Balance Jan 31 Adjusting 12 20 50 Accounts Payable Date Explanation Ref. Debit Credit Jan. 1 Balance Balance 31 75 2875 7 31 2.950 595 14 31 2355 30 2.300 31 4655 75 4580 Accounts Payable Date Explanation Ref. Credit Debit Balance 75 Jan. 1 Balance 4 JI 2875 2.950 7 31 595 2355 14 J1 2.300 4,655 30 31 75 4.580 31 31 4580 0 0 Salaries and Wages Payable Date Explanation Jan. 1 Balance Ref. Debit Credit Balance 56 28 31 56 Debit Credit Balance Unearned Service Revenue Date Explanation Ref. Jan. 1 Balance Interest Payable Date Explanation Ref. Jan. 1 Balance 300 Debit Credit Balance 15 Jan 31 Adjusting 32 10 25 Notes Payable Date Explanation Ref. Debit Credit Balance Jan. 1 Balance 2000 Common Stock Ref. Debit Date Explanation Jan. 1 Balance Credit Balance 800 31 1.000 1.800 17 Retained Earnings Date Explanation Ref. Debit Credit Balance Jan. 1 Balance Dividends 1.529 Date Explanation Ref. Debit Credit Balance Jan 31 1 750 750 Question 4 of 6 13.99 / 16.7 1.525 Jan. 1 Balance Dividends Date Explanation Jan 31 Sales Revenue Ref. Debit Credit Balance J1 750 750 Date Explanation Ref. Debit Credit Balance Jan. 12 31 1.450 20 3.450 31 2.300 5.750 Cost of Goods Sold Date Explanation Jan. 12 Ref. Debit Credit Balance 31 1785 1.785 31 1.190 2.975 Ref. Debit 20 Salaries and Wages Expense Date Explanation Jan. 28 Utilities Expense Date Explanation Jan 30 Credit Balance 31 160 160 Ref. Debit Credit Balance 21 70 Depreciation Expense Date Explanation 70 Ref. Debit Credit Jan 31 Adjusting 12 Balance 20 Insurance Expense Date Explanation Ref. Debit Credit Adjusting 12 Balance 110 Freight-Out 110 Date Explanation Ref. Debit Credit 11 Balance Jan 14 Interest Expense Date Explanation 75 75 Ref. Debit Adjusting Credit 12 Balance 10 TO Cookie Creations Adjusted Trial Balance January 31, 2013 Debit Credit Cash 2.159 5 Accounts Receivable 500 Inventory 175 Supplies 350 Prepaid insurance 1.100 Equipment 1.200 Accumulated Depreciation Equipment 60 Uneared Service Reven 300 Interest Payable 35 Notes Payable -2000 Commen Stock TO Dividends 750 Sales Revenge 5.750 Cost of Goods Sold 2.975 Saries and Wages Expert 160 Uites Expense 20 Depreciation Expens 20 Insurance Expense 110 Freight Out 75 Interested 10 Notes Payable 2000 Common Stock 1,800 Dividends 750 Sales Revenue 5.750 Cost of Goods Sold 2.975 Salaries and Wages Expense 160 Utilities Expense 70 Depreciation Expense 20 Insurance Expense 110 Freight-Out 75 Interest Expense 10 Retained Earning 1.529 Totals 11.464 11.464 (f Prepare a multiple-step income statement for the month ended January 31, 2019. (Enter negative amounts using either a neputive sign preceding the number es - 45 or parentheses (450 COOKIE CREATIONS INC. Income Statement January 31, 2019 > List of Accounts Save for Later Last saved 44 seconds Attempts: 0 of 3 used Sun Anwe