Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with The Balance Sheet. The following transactions occurred during the month of October. Oct. 8 Madison cashes her U . S .

Please help me with The Balance Sheet. The following transactions occurred during the month of October.
Oct. 8 Madison cashes her U.S. Savings Bonds and receives $740, which she deposits in her personal bank account.
8 She opens a bank account under the name Sweet Treats and transfers $600 from her personal account to the new account.
(11) Madison pays $75 for advertising. Check 152.
13. She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $140 cash. Check 153.
15 Madison purchases a food processor for $300. Check 154.
16. Madison realizes that her initial cash investment is not enough. Her grandmother lends her $5,000 cash, for which Madison signs a note payable in the name of the business. Madison deposits the money in the business bank account. The note will be repaid in 24 months at 7.5% interest.
17 She buys more baking equipment for $900 cash. Check 155.
20. She teaches her first class and collects $135 cash.
25 Madison withdraws $100 from the business for personal expenditures. Check 156.
30. Madison pays $1,200 for a one-year insurance policy that will expire on November 1 of the next year. Check 157.
30 A friend of Madison's asked her to teach a class at the neighborhood school, Newbury Elementary School. Madison agreed and taught a group of 35 first-grade students how to make gingerbread cookies. The next day, Madison prepared an invoice for $300 and left it with the school principal. The principal said that he will pass the invoice along to the head office, and it will be paid sometime in November.
As of October 31, the following adjusting entry data is available.
A count reveals that $45 of baking supplies were used during October.
Madison estimates that her baking equipment depreciates $10 per month.
Madison has decided to accrue the interest each month just to be sure her books correctly reflect what needs to be repaid. She will accrue a full month's interest in Oclober, since she wouldn't even be off the ground without her grandma's help.
Madison had a friend assist her with the Newbury Elementary School class. She decides to hire her friend as an employee. She owes her $45 for the October 30 class, that she will pay on November 15.
At the beginning of November, Madison decides to expand her business by selling fine European mixers. The owner of Batter Biender Supply Co. has approached Madison to become the exclusive distrbutor of these fine mixers in her state. The current cost of a mixer is $580, and Madison plans to sell each mixer for $1,200. Each appliance has a serial number and can be easily idenutifed. Madison uses the perpetual inventory system to account for these fine mixers. She also decides to start using special joumals and subsidiary ledgers to help keep track of her new customers and vendors, sales and purchases, and cash flows. (Hint: Refer to Chapter 11 to calculate the cost of inventory.)
The folowing transacions occurred during the month of November.
Nov 4 Boughl five mixers on account from Batter Blender Supply Co. for $2,900, terms N/30.
Paid $75 freight on the November 4 purchase. Check 158.
9 Bought four mixers on account from Batter Blender Supply Co. for $2,320, terms n/30.
10 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 Treals.
(11) Paid $60 freight on the November 9 purchase. Check 159.
(15) 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 $155 cell phone bill (Hint: Use Utilties 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 $3,600, terms n/30. Invoice 1011.(Hint: You must record both the revenue and expense components on all sales transactions.)
26 Sold three mixers for $3,600 cash.
29 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. november 30th adjusting ENTries. account of baking supplies reveals that none were used in November. another month's worth of depreciation needs to be recorded on the baking equipment bought in October. One month's worth of insurance has expired. the Madison records another month of ACCrued interest on her grandma's loan
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Future Of Auditing

Authors: David Hay

1st Edition

1138477087, 9781138477087

More Books

Students also viewed these Accounting questions

Question

Why is it important to have a code of ethics?

Answered: 1 week ago