Prepe u SERIAL PROBLEM: KATE'S CARDS (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters / through 4.) SPS. Kate was a little worried about some of the practices of Fred Abbott, the CEO of Sentime cided that an association with Sentiments could damage the reputation of her own company concerned that her business be viewed as socially responsible and any damage to herren early stage could prove very difficult to overcome. She therefore decided to concentrate producing a quality product that consumers would be proud to purchase and send to their As expected, November saw a boom in Kate's greeting card business. She invested in computer graphics equipment, which she partially funded with a bank loan of $15.000 and an investment of her own funds into the business. The loan carries an interest rate of six interest payments required semiannually. The entire principal balance is due in one balle in two years. Kate uses a perpetual inventory system. As of December 2, 2018, Kate's Cards following account balances: Sentiments, and de wany. Kate is very reputation at this rate her efforts on A to their loved ones. invested in additional and an additional te of six percent with le in one balloon payment Kate's Cards had the Cash... Accounts receivable........ Inventory........... Other current assets.... Computer equipment. $11,900 16.800 16,000 3,600 38,900 900 Accumulated depreciation ........... $ 1.600 Accounts payable.............. 13,800 Other current liabilities.... Long-term note payable. 15,000 Common stock ...... 25,000 Retained earnings .... 30.900 The company had the following transactions during December 2018: Dec 1 Paid $1,200 rent for the month. 7 Paid $1,800 to employees. Of this amount, S900 was for an amount owed from November, Wages due to employees at the end of each month are recorded as Other Current Liabilities. 9 Received 55,400 from customers as payment on account. 12 Sold, for cash, $11,000 of greeting cards. This merchandise had cost $6,000 to produce. 14 Purchased additional inventory totaling $7.000 on account with terms of 2/10,n/45. 15 Paid cash for supplies (listed as Other Current Assets) in the amount of $600. 19 Sold, on account with terms of 2/10, n/30, greeting cards totaling $6.000. The merchandise had cost $4,000 to produce. 21 Paid additional wages of $1,400. 25 Paid the total owed for the merchandise that was purchased on December 14. 28 Received payment in full from the customer that purchased the merchandise on December 19 31 Depreciation for the month totaled $900. 31 A physical count of inventory and supplies revealed that $13.000 and $2,000, respectively, were on hand at year-end. Assume that Other Current Assets consists only of the cost of supplies. tikstudy.com mbridge Business Publishers Chapter 5 Accounting for Merchandis Required a. Prepare journal entries for the December transactions. b. Prepare a classified income statement for the month of December 2018. C Calculate Kate's gross profit percentage and return on sales ratio for December 2018. EXTENDING YOUR ORTING AND ANALYSIS 1 . Columbia Sportswear Company The financial state the end of this book