October transactions have been completed.

At the beginning of November, Madison decides to expand her business by selling ne European mixers. The owner of Batter Blender Supply Co. has approached Madison to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately $575, and Madison plans to sell each for $1.150. Each appliance has a serial number and can be easily identied. Madison uses the perpetual inventory system to account for these ne mixers. She also decides to start using special journals and subsidiary ledgers to help keep track of her new customers and vendors, sales and purchases, and cash ows. (Hint: Refer to Chapter 11 to calculate the cost of inventory.) The following transactions occurred during the month of November. Nov. 4 6 7 10 12 15 20 21 22 23 26 28 29 30 30 Bought ve mixers on account from Batter Blender Supply Co. for $2,875, terms ni30. Paid $100 freight on the November 4 purchase. Check 158. Returned one of the mixers to Batter Blender because it was damaged during shipping. Batter Blender issues Sweet Treats credit for the cost of the mixer. Bought four mixers on account from Batter Blender Supply Co. for $2,300, terms m'30. Madison is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an additional $2,000 cash in Sweet Treats. Paid $80 freight on the November 9 purchase. Check 159. Madison issued a check to her assistant for all the help at the elementary school on October 30. (Recall this amount was accrued at the end of October.) Check 160. Paid a $145 cell phone bill (Hint: Use Utilities Expense). Check 161. Paid Batter Blender the amount due from the November 4 purchase. Check 162. Collected $300 from the October 30 transaction with Newbury Elementary School. Three mixers are sold to Peter's Pastries on account for $3,450, terms m'30. Invoice 1011. (Hint: You must record both the revenue and expense components on all sales transactions.) Sold two mixers for $2,300 cash. Collected the amount due from Peter's Pastries for the November 23 transaction. Paid Batter Blender the amount due from the November 9 purchase. Check 163. Paid her assistant for the last two weeks of November in the amount of $960. Check 164 Madison withdrew $750 cash for personal use. Check 165. SWEET TREATS PRACTICE SET Madison Carter spent much of her childhood learning the art of cookie-making from her grandmother. They spent many enjoyable hours mastering every type of cookie imaginable and later creating new recipes that were both healthy and delicious. Now at the start of her second year in college, Madison is investigating various possibilities for starting her own business as part of the requirements of the entrepreneurship program in which she is enrolled. A long-time friend insists that Madison has to somehow include cookies in her business plan. After a series of brainstorming sessions, Madison settles on the idea of operating a cookie-making school called "Sweet Treats". She will start on a part-time basis and offer her services \"in-house". Now that she has started thinking about it, the possibilities seem endless. During the fall, she will concentrate on holiday cookies. She will offer individual lessons and group sessions. Madison decides to operate Sweet Treats as a sole proprietorship beginning on October 8'\General Journal 11 Date Account Titles and Explanations Ref. Debit Credit Oct. 8 Cash 500 Owner's Capita 500 (Amount invested in the business) Oct. 11 Advertising Expense 65 Cash 55 Adversting expense paid with check 153) Oct. 13 Baking Supplies 125 Cash 125 Baking supplies for the business with check 154) Oct. 14 Equipment 300 Owner's Capital 300 Invested a food processer to the business) Oct. 16 Cash 5000 Note Payable 5000 To record note payable) Oct. 17 Eqiupment 900 Cash 900 Purchased bakinf equipment with cash Oct. 20 Cash 125 Service Revenue 125 Recorded earned revenue Oct. 25 Owner's Drawings 100 Cash 100 For personal withdrawl) Oct. 30 Prepaid Insurance 1320 Cash 1320 (To record prepaid Insurance) Oct. 3 Accounts Receivable 300 Service Revenue 300 Invoice for elementary school class Chart of Accounts General Journal General Ledger Cash Receipts Journal Cash Payments Journal Purchases Journal SalGeneral Journal J2 Date Account Titles and Explanations Ref. Debit Credit Oct. 31 Supplies Expense 35 Supplies 35 Baking supplies consumed in the year) Oct. 31 Depreciation Expense 20 Accumulated Depreciation 20 (To record deprecation Oct. 31 Interest Expense 35 Interest Payable 35 (Interest accured) Oct. 31 Salary & Wages Expense 45 Salary & Wages Payable 45 (Salary to be paid)General Journal 13 Date Account Titles and Explanations Ref. Debit Credit Find & Select\fGeneral Ledger Cash No. 101 Date Explanation Ref. Debit Credit Balance Oct. 8 Owner's Capital 500.00 500.00 Oct. 11 Advertising Expense 65.00 435.00 Oct. 13 Supplies 125.00 310.00 Oct. 16 Note Payable 5,000.00 5,310.00 Oct. 18 Equipment 900.00 4,410.00 Oct. 20 Service Revenue 125.00 4,535.00 Oct. 25 Owner's Drawing 100.00 4,435.00 Oct. 30 Prepaid Insurance 1,320.00 3,115.00 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance Oct. 30 Service Revenue 300.00 300.00 Inventory No. 120 Date Explanation Ref. Debit Credit Balance Chart of Accounts General Journal General Ledger Cash Receipts Journal Cash Payments Journal Purchases Journal Sales Journal AR Sub Ledger AP Sub Ledger October Wor + + 100%19 Baking Supplies No. 126 0 Date Explanation Ref. Debit Credit Balance 1 Oct. 13 Cash 125.00 125.00 Oct. 31 Supplies Expense 35.00 90.00 9 Prepaid Insurance No. 130 Date Explanation Ref. Debit Credit Balance 51 Oct. 30 Cash 1,320.00 1,320.00 2 5 8 Equipment No. 157 Date Explanation Ref. Debit Credit Balance 0 Oct. 14 Owner's Capital 300.00 300.00 71 Oct. 17 Cash 900.00 1,200.00 2 6 Accumulated Depreciation-Equipment No. 158 78 Date Explanation Ret. Debit Credit Balance 79 Oct. 31 Depreciation Expense 20.00 20.00 6 Notes Payable No. 200 Date Explanation Ref. Debit Credit Balance 8 Oct. 16 Cash 5,000.00 5,000.00 9 Chart of Accounts General Journal General Ledger Cash Receipts Journal CashAccounts Payable No. 201 Date Explanation Ref. Debit Credit Balance 05 06 Salaries and Wages Payable No. 212 Date Explanation Ret. Debit Credit Balance 08 Oct. 31 Salaries and Wages Expense 45.00 45.00 09 10 - w 15 Interest Payable No. 230 16 Date Explanation Ref. Debit Credit Balance 17 Oct. 31 Interest Expense 35.00 35.00 18 19 20 21 23 24 Owner's Capital No. 301 25 Date Explanation Ref. Debit Credit Balance 26 Oct. 8 Cash 500.00 500.00 Oct. 14 Equipment 300.00 800.00 8 29 30 31 32 Owner's Drawing No. 306 34 Date Explanation Ret. Debit Credit Balance $5 Oct. 25 Cash 100.00 100.00 Chart of Accounts General Journal General Ledger Cash Receipts Journal Cash PaymentsL42 Income Summary L59 Service Revenue L60 L51 m ' """""""""""""" _ ' """"""""""""""""""""""""""""""""""""""""""""""""""""""""""" - """"""""""" _ """""""""""""""""" - """"""" "" _ """""""" -. 300-00 w L79 Cost of Goods Sold No. 505 L80 L8 1 - I """""""""""""" - """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" - """"""""""" - """""""""""""""""" - """""""""""""""""" - """"""""""""""""" L32 _-_ 4 p Chart of Accounts General Journal General Ledger Cash Receipts Journal Cash Payments .Jou Cost of Goods Sold No. 505 30 Date Explanation Ref. Debit Credit Balance 6 38 89 Advertising Expense No. 610 90 Date Explanation Ref. Debit Credit Balance Oct. 11 Cash 65.00 65.00 93 4 96 Baking Supplies Expense No. 631 18 Date Explanation Ref. Debit Credit Balance Oct. 31 Baking Supplies 35.00 35.00 02 3 04 05 Depreciation Expense No. 711 6 Date Explanation Debit Credit Balance Oct. 31 Accumulated Depreciation 20.00 20.00 08 09 LO 11 Insurance Expense No. 722 15 Date Explanation Ref. Debit Credit Balance 6 17 9 0 D Chart of Accounts General Journal General Ledger Cash Receipts Journal CaSalaries and Wages Expense No. 726 Date Explanation Ref. Debit Credit Balance Oct. 31 Salaries and Wages Payable 45.00 45.00 Rent Expense No. 729 Date Explanation Ret. Debit Credit Balance .3 Utilities Expense No. 732 Date Explanation Ref. Debit Credit Balance 4 Interest Expense No. 905 Date Explanation Ref. Debit Credit Balance Oct. 31 Interest Payable 35.00 35.00 Chart of Accounts General Journal General Ledger Cash Receipts Journal Cash Payments JouA B C D E F G H K L M N October Worksheet Trial Balance Adjustments Adjusted Trial Bal. Income Statement Balance Sheet Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash 3,115.00 3,115.00 3,115.00 Accounts Receivable 300.00 300.00 300.00 Inventory Baking Supplies 125.00 35.00 90.00 90.00 Prepaid Insurance 1,320.00 1,320.00 1,320.00 Equipment 1,200.00 1,200.00 1,200.00 Accum. Depr.-Equipment 20.00 20.00 20.00 Notes Payable 5,000.00 5,000.00 5,000.00 Accounts Payable Salaries and Wages Payable 45.00 45.00 45.00 Interest Payable 35.00 35.00 35.00 Owner's Capital 800.00 800.00 800.00 Owner's Drawings 100.00 100.00 100.00 Service Revenue 425.00 425.00 425.00 Sales Revenue Cost of Goods Sold Advertising Expense 65.00 65.00 65.00 Baking Supplies Expense 35.00 35.00 35.00 Depreciation Expense 20.00 20.00 20.00 Insurance Expense Salaries and Wages Expense 45.00 45.00 45.00 Rent Expense Utilities Expense Interest Expense 35.00 35.00 35.00 TOTALS 6,225.00 6,225.00 135.00 135.00 6,325.00 6,325.00 Net Income 225.00 225.00 TOTALS 425.00 425.00 6,125.00 6,125.00Purchases Journal P1 Inventory Dr. Date Account Credited Terms Ref. Accounts Payable Cr. November Totals AccountsSales Journal S1 Invoice Accts. Rec. Dr. COGS Dr. Date Account Debited No. Ref. Sales Rev. Cr. Inventory Cr. November Totals Accounts Sales Journal S2November Worksheet Trial Balance Adjustments Adjusted Trial Bal. Income Statement Balance Sheet Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash Accounts Receivable Inventory Baking Supplies Prepaid Insurance Equipment Accum. Depr.-Equipment Notes Payable Accounts Payable Salaries and Wages Payable Interest Payable Owner's Capital Owner's Drawings Service Revenue Sales Revenue Cost of Goods Sold Advertising Expense Baking Supplies Expense Depreciation Expense Insurance Expense Salaries and Wages Expense Rent Expense Utilities Expense Interest Expense TOTALS Net Income TOTALS