Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1 Elsa Snow has been a lover of ice cream from she was very young. She grew up wanting to own her very own

Question 1
Elsa Snow has been a lover of ice cream from she was very young. She grew up wanting to own her
very own ice creamery and did so in 2015. She opened her very own ice cream shop with several exotic
flavours of ice cream she invented herself by mixing and matching flavours. Among these creations
were nutterbutter delight, a peanut butter flavoured ice cream and squeeze a peach a frozen
confection with peach pieces incorporated. The following information relates to Elsas Exotic Creamery
for the month of July 2015.
July 1 started business with, cash, $40,000, building, $450,000 and a motor vehicle $240,000,
equipment, $400,000
July 2 received loan repayable by 2021 from the bank, $460,000 by cheque
July 3 paid for store furniture by cheque $120,000.
July 3 bought merchandise for resale from Cremo, by cheque $130,000.
July 4 purchased a blast freezer, which froze the ice cream faster, on credit from Courts Ltd. for
$200,000.
July 4 sold merchandise to Tutti Fruitalicious, for cash $110,000.
July 5 sold merchandise on credit to Devon Mouse Ltd $95,000 and Crazy Cream $85,000.
July 6 merchandise valued at $2,500, sold on credit to Crazy Cream on July 5, was returned to Elsa as
she had sent the incorrect flavour. A credit note was given to Crazy Cream.
July 7 bought merchandise on credit from Serge Island Dairies $60,000.
July 8 sold merchandise on credit to Pink Bunny Enterprise $80,000.
July 10 bought stationery for cash $15,000.
July 11 paid Jamaica Water Commission by cash, water rates $30,000.
July 13 returned unsatisfactory merchandise to Serge Island Dairies for $6,000 receiving a credit note
for these goods. They sent goats milk instead of cows milk.
July 15 bought merchandise on credit from Kristoffs Frozen Confections $15,200.
July 16 sold merchandise to Princess Jasmine receiving a cheque for $135,000
July 17 Devon Mouse Ltd. settled his account with cash receiving a 3% cash discount.
July 18 lodged cash of $85,000 to the business bank account.
July 20 paid Serge Island Dairies $52,000 in full settlement of the balance outstanding by cheque having
received a discount of $2,000.
July 22 paid utilities for July by cheque $60,000.
July 25 paid staff salaries by cheque $125,000.
July 26 received a cheque of $65,000 for interest on deposits in the bank.
July 27 purchased merchandise on credit from Olafs Milk Factory for $20,000.
July 30 Elsa used 13 buckets of nutterbutter delight ice-cream valued at $30,000 for her sister, Annas
16 th birthday party
REQUIRED:
a) Journalize the transactions for the month. (Narrations are not necessary)
b) Post the above transactions in the General ledger.
c) Extract a trial balance as at July 312015.
d) Journalize and post the adjusting entries using the following information:
The monthly utility expense is $55,000.
One employee complained that her salary was short by $6,500. Investigations proved that
the employee was indeed short paid for the month.
The insurance for the Creamery was due and payable by July 1 st . The annual premium is
$60,000 and the expense is incurred on a pro rata basis.
It was found that of Pink Bunny Enterprises balance, $10,000 has to be written off as
bad debts.
Depreciation for the motor vehicle has not been taken into account for the month. The
business uses the straight line method at a rate of ten percent (10%) per annum.
Note: when doing the adjusted T accounts only the accounts that have been affected
need to be done
e) Prepare an adjusted trial balance with the inclusion of the above balances
f) Prepare the Statement of Profit or Loss and the Statement of Financial Position for the period
under review. For use in the financial statements, closing stock amounts to $35,000 at the end of
the month.
*NOTE*
Could you give me the specefics for the general ledger and questions e and f please? i posted the question already and i know the limitations with formatting but please type it out.

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

Step: 3

blur-text-image

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

Introductory Accounting Finance And Auditing For Lawyers

Authors: Lawrence Cunningham

7th Edition

1634604105, 9781634604109

More Books

Students also viewed these Accounting questions