Question 1 of 1 - / 10 E Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European miers. The owner of Kzinski Supply Co. has approached Natalie to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these miers. Each appliance has a serial number and can be easily identified. Natalie asks you the following questions 1 2 "Would you consider these mixers to be inventory or should they be classified as supplies or equipment? "I've learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to sell?" "How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all? 3. The trial balance for Cookie Creations as on December 31, 2018 is as follows: COOKIE CREATIONS Post-Closing Trial Balance December 31, 2018 Account Debit Credit Cash $1,180 Accounts Receivable 875 Supplies 350 Prepaid Insurance 1,210 Acer www.mend per App https://education wiley.com/www/assessment player/index.htmed Munchiedlectabde695c-4a5-a6.a c Ch 5 Cookie Creations Accounting Project Question 1 of 1 > COOKIE CREATIONS Post-Closing Trial Balance December 31, 2018 Account Credit 51.10 Accounts Receiva Supplies Preinsurance 1230 1200 50 56 Equipment Accued Depreciation Equipment Accounts Payable Salaries and Wages Payable Uneared Service Interest Payable Nota Payable Common stock RE 300 15 2000 ECO 1339 5453 4815 Type here to search OR 69 hp - / 10 In the end, Natalie decides to use the perpetual inventory system. The following transactions happen during the month of January. E Jan, 4 6 7 8 12 14 14 17 Bought five deluxeembers on account from Kzinski Supply Co. for $2,875, FOB shipping point, terms 11/30. Paid $100 freight on the January 4 purchase. Returned one of the mixers to Kzinski because it was damaged during shipping, Kzinski issues Cookie Creations credit for the cost of mixer plus $20 for the cost of freight that was paid on January 6 for one mixer. Collected $375 of the accounts receivable from December 2018. Three deluce mixers are sold on account for $3,450, FOB destination, terms 1/30. (Cost of goods sold is $595 per mier) Paid the $75 of delivery charges for the three mixers that were sold on January 12. Bought four deluxe mixers on account from Kzinski Supply Co. for $2,300, FOB shipping point, terms 1/30. Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an additional $1,000 cash in Cookie Creations in exchange for common stock. Paid $80 freight on the January 14 purchase. Sold two deluxe mixers for $2,300 cash. (Cost of goods sold is $595 per mixer) Natalie issued a check to her assistant for all the help the assistant has given her during the month. Her assistant worked 20 hours in January and is also paid the $56 owed at December 31, 2018. (Natalie's assistant earns $8 an hour) Collected the amounts due from customers for the January 12 transaction. Paid a $145 utility bill (575 for the December 2018 accounts payable and $70 for the month of January). Paid Kzinski all amounts due. Cash dividends of $750 are paid. 18 20 28 28 30 31 31 = Prepare the January 2019 transactions. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts. Record entries in the order displayed in the problem statement) Date Account Titles and Explanation Debit Credit Jan 4 Jan 6 5 Jan 7 Jan 7 > O 2 6 * a W 0 ECCO 62F (To record sales revenue) (To record cost of goods sold) (To record delivery charges paid) (To record purchases made) Cash Date Explanation Ref. Debit Credit Balance Balance 31 01 01 > 31 > 31 31 >> 11 01 62F a W RI o DOO 11 Supplies Date - Explanation Ref. Debit Credit Balance Balance Prepaid Insurance Date Explanation Ref. Debit Credit Balance Balance Equipment Date Explanation Ref. Debit Credit Balance Balance Accumulated Depreciation -Equipment Date Explanation Debit Credit Balance Balance Accounts Payable Debit Credit Balance Date Explanation Ref. Balance C Balance Accounts Payable Date Explanation Ref. Debit Credit Balance Balance J1 31 31 J1 31 Salaries and Wages Payable Date Explanation Ref. Debit Credit Balance Balance J1 Uneamed Service Revenue Unearned Service Revenue Date Explanation Ref. Debit Credit Balance Balance Interest Payable Date Explanation Ref. Debit Credit Balance Balance Notes Payable Date Explanation Ref. Debit Credit Balance Balance Common Stock Date Explanation Ref. Debit Credit Balance Balance 31 Retained Earnings Date Explanation Ref. Debit Credit Balance -/10 E Retained Earnings Date Explanation Ref. Debit Credit Balance Balance Dividends Date Explanation Ref. Debit Credit Balance J1 Sales Revenue Date Explanation Ref. Debit Credit Balance J1 31 Cost of Goods Sold Date Explanation Debit Credit Balance J1 31 Salaries and Wages Expense Salaries and Wages Expense Date Explanation Ref. Debit Credit Balance J1 Utilities Expense Date Explanation Ref. Debit Credit Balance 31 Freight-Out Date Explanation Ref. Debit Credit Balance 31 List of Accounts Cookie Creations Trial Balance Debit Credit As of January 31, the following adjusting entry data are available 1 2 3. 4. A count of baking supplies reveals that none were used in January Another month's worth of depreciation needs to be recorded on the $1.200 of baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months and no salvage value.) An additional month's worth of interest on her grandmother's $2,000 loan needs to be accrued. (The Interest rate is 6%) During the month, $110 of insurance has expired. An analysis of the unearned service revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result, there is no change to the unearned service revenue account. Natalie hopes to complete the remaining lessons in February An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining 5. 6. Prepare the adjusting journal entries required. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) No. Date Account Titles and Explanation Debit Credi 1. 2. 3. 4 5 6 520 Question 1 of 1 - / 10 E Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European miers. The owner of Kzinski Supply Co. has approached Natalie to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these miers. Each appliance has a serial number and can be easily identified. Natalie asks you the following questions 1 2 "Would you consider these mixers to be inventory or should they be classified as supplies or equipment? "I've learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to sell?" "How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all? 3. The trial balance for Cookie Creations as on December 31, 2018 is as follows: COOKIE CREATIONS Post-Closing Trial Balance December 31, 2018 Account Debit Credit Cash $1,180 Accounts Receivable 875 Supplies 350 Prepaid Insurance 1,210 Acer www.mend per App https://education wiley.com/www/assessment player/index.htmed Munchiedlectabde695c-4a5-a6.a c Ch 5 Cookie Creations Accounting Project Question 1 of 1 > COOKIE CREATIONS Post-Closing Trial Balance December 31, 2018 Account Credit 51.10 Accounts Receiva Supplies Preinsurance 1230 1200 50 56 Equipment Accued Depreciation Equipment Accounts Payable Salaries and Wages Payable Uneared Service Interest Payable Nota Payable Common stock RE 300 15 2000 ECO 1339 5453 4815 Type here to search OR 69 hp - / 10 In the end, Natalie decides to use the perpetual inventory system. The following transactions happen during the month of January. E Jan, 4 6 7 8 12 14 14 17 Bought five deluxeembers on account from Kzinski Supply Co. for $2,875, FOB shipping point, terms 11/30. Paid $100 freight on the January 4 purchase. Returned one of the mixers to Kzinski because it was damaged during shipping, Kzinski issues Cookie Creations credit for the cost of mixer plus $20 for the cost of freight that was paid on January 6 for one mixer. Collected $375 of the accounts receivable from December 2018. Three deluce mixers are sold on account for $3,450, FOB destination, terms 1/30. (Cost of goods sold is $595 per mier) Paid the $75 of delivery charges for the three mixers that were sold on January 12. Bought four deluxe mixers on account from Kzinski Supply Co. for $2,300, FOB shipping point, terms 1/30. Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an additional $1,000 cash in Cookie Creations in exchange for common stock. Paid $80 freight on the January 14 purchase. Sold two deluxe mixers for $2,300 cash. (Cost of goods sold is $595 per mixer) Natalie issued a check to her assistant for all the help the assistant has given her during the month. Her assistant worked 20 hours in January and is also paid the $56 owed at December 31, 2018. (Natalie's assistant earns $8 an hour) Collected the amounts due from customers for the January 12 transaction. Paid a $145 utility bill (575 for the December 2018 accounts payable and $70 for the month of January). Paid Kzinski all amounts due. Cash dividends of $750 are paid. 18 20 28 28 30 31 31 = Prepare the January 2019 transactions. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts. Record entries in the order displayed in the problem statement) Date Account Titles and Explanation Debit Credit Jan 4 Jan 6 5 Jan 7 Jan 7 > O 2 6 * a W 0 ECCO 62F (To record sales revenue) (To record cost of goods sold) (To record delivery charges paid) (To record purchases made) Cash Date Explanation Ref. Debit Credit Balance Balance 31 01 01 > 31 > 31 31 >> 11 01 62F a W RI o DOO 11 Supplies Date - Explanation Ref. Debit Credit Balance Balance Prepaid Insurance Date Explanation Ref. Debit Credit Balance Balance Equipment Date Explanation Ref. Debit Credit Balance Balance Accumulated Depreciation -Equipment Date Explanation Debit Credit Balance Balance Accounts Payable Debit Credit Balance Date Explanation Ref. Balance C Balance Accounts Payable Date Explanation Ref. Debit Credit Balance Balance J1 31 31 J1 31 Salaries and Wages Payable Date Explanation Ref. Debit Credit Balance Balance J1 Uneamed Service Revenue Unearned Service Revenue Date Explanation Ref. Debit Credit Balance Balance Interest Payable Date Explanation Ref. Debit Credit Balance Balance Notes Payable Date Explanation Ref. Debit Credit Balance Balance Common Stock Date Explanation Ref. Debit Credit Balance Balance 31 Retained Earnings Date Explanation Ref. Debit Credit Balance -/10 E Retained Earnings Date Explanation Ref. Debit Credit Balance Balance Dividends Date Explanation Ref. Debit Credit Balance J1 Sales Revenue Date Explanation Ref. Debit Credit Balance J1 31 Cost of Goods Sold Date Explanation Debit Credit Balance J1 31 Salaries and Wages Expense Salaries and Wages Expense Date Explanation Ref. Debit Credit Balance J1 Utilities Expense Date Explanation Ref. Debit Credit Balance 31 Freight-Out Date Explanation Ref. Debit Credit Balance 31 List of Accounts Cookie Creations Trial Balance Debit Credit As of January 31, the following adjusting entry data are available 1 2 3. 4. A count of baking supplies reveals that none were used in January Another month's worth of depreciation needs to be recorded on the $1.200 of baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months and no salvage value.) An additional month's worth of interest on her grandmother's $2,000 loan needs to be accrued. (The Interest rate is 6%) During the month, $110 of insurance has expired. An analysis of the unearned service revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result, there is no change to the unearned service revenue account. Natalie hopes to complete the remaining lessons in February An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining 5. 6. Prepare the adjusting journal entries required. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) No. Date Account Titles and Explanation Debit Credi 1. 2. 3. 4 5 6 520