Part A $-$Starting a New Month

Part A

Set up a basic accounting system for your flower shop. This includes creating accounts for your assets, liabilities, and equity $($general ledger$).$

Record the following transactions for the month of January:

January $1$

You invested $$10,000$of your own cash into the business.

You purchased a new fridge to display your arrangements for $$2,199.$

You obtained liability insurance for the entire year and paid $$1,320$in cash.

January $2,$

You purchased $$4,000$worth of flowers. You paid $$1,000$in cash and the remaining $$3,000$on account.

You purchased $$1000$worth of supplies such as tape, cages, foam, picks, glue, and wire. You paid cash.

You hired two part$-$time employees to work $20$hours per week each at a rate of $$16$per hour.

January $3.$

You sold $$800$worth of flowers to a customer for cash.

January $8$

You pay your staff the outstanding $$1,500.$

January $10,$

You sold $$2,200$worth of flowers to a customer on account.

January $15$:

You collected $$500$from the customer who purchased flowers on July $10.$

You collected $$2,000$in cash from customers for flower arrangements.

End of first pay period. Your employees worked $128$hours in the first pay period of January. Paydays are Fridays following $5$days after the pay period ends.

January $19$

You paid your employees $128$hours for their work in the first two weeks of January.

January $20$

You collect $$3,000$from customers who owe you.

You paid $$1,000$to the wholesaler to reduce your outstanding balance.

January $22$:

You sold $$5,000$worth of flower arrangements to a local event planner on account.

January $25$

You paid $$200$for advertising expenses.

You received a $$500$deposit for flower arrangements to be ready in February $14.$

January $31$:

You sold $$3,500$worth of flowers to a customer for cash.

You paid $$2,500$to your flower supplier for the flowers you purchased on January $2$nd $.$

You pay yourself $$2,200($owner$\text{'}$s Withdrawal$)$

Required for part A

Use the templates in the Assignment Package

Journalize the transactions.

Post the January transactions to the general ledger accounts. Make sure to add the beginning balances based on the December post$-$closing trial balance.

Prepare the trial balance for January.

Part B $-$ Closing the Cycle

As of December $31,$ year$-$end, the following adjusting entry data are provided.

Prepaid Rent: Rent is paid every six months upfront, and rent is paid through the end of February.

Inventory: A physical count reveals $$4,500$ worth of inventory and $$575$ worth of supplies remain.

Advertising supplies: You used $$45$ worth of supplies.

Depreciation: The equipment excluding the new fridge has a $5-$year useful life and a $$2,200$ salvage value. The new fridge has a $7-$year useful life and a $$204$ salvage value.

Accrued Salaries: Employees earned $176$ hours for work done through January $31$st$,$ payable on February $9$th$.$

Prepaid insurance: One month's worth of insurance has expired.

A cell phone invoice is received for $$75.$ The invoice is for services provided during January and is due on February $22.$

Required for part B:

Use the templates in the Assignment Package

Prepare adjusting journal entries for January.

Post adjusting entries to the ledger. Use the ledger from Part A$.$

Prepare the adjusted trial balance for January $31,2024.$

Prepare the Income statement, Statement of Owner's Equity, and Balance Sheet.

Prepare closing entries as of January $31,2024$

Prepare a post$-$closing trial balance.