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QUESTION 1 The following is a summary of transactions for January 20xx, gathered by the Sample Cafe bookkeeper. Sample Cafe Transactions Item Notes 7,500 medium

QUESTION 1

The following is a summary of transactions for January 20xx, gathered by the Sample Cafe bookkeeper.

Sample Cafe Transactions

Item Notes
7,500 medium cups of coffee sold at $3.00 each Includes 400 medium cups medium cups sold to the college and delivered to a reception that has been invoiced, but not yet paid.
3,700 large cups of coffee sold at $4.00 each
Espresso maker purchased last year for $12,000 5-year life
$600 premium for business insurance Premium for full year
$3,400 for rent Includes $2,000 in rent deposits.
$2,200 for coffee beans Includes coffee discarded valued at $100
$1,600 for coffee cups 0 cups in inventory at the beginning of January. $600 worth of cups still in inventory at the end of month.
$16,100 to employees for payroll $2,200 owed in payroll taxes
$300 of interest on loan Paid mid-month
$1,100 for electricity and water Includes $400 in utility deposits
$11,600 in advertising $2,900 per week billed monthly

Use the preceding transaction information to create a Cash-Based Income Statement for January using the following template.

Account Balance
Revenues $
Expenses
Coffee and Cups $
Salaries and Wages $
Rent and Utilities $
Advertising $
Insurance $
Equipment $
Interest $
Other Expenses $
Total Expenses $
Net Income $

QUESTION 2

For your convenience, the summary of transactions from the previous question is duplicated below.

Sample Cafe Transactions

Item Notes
7,500 medium cups of coffee sold at $3.00 each Includes 400 medium cups medium cups sold to the college and delivered to a reception that has been invoiced, but not yet paid.
3,700 large cups of coffee sold at $4.00 each
Espresso maker purchased last year for $12,000 5-year life
$600 premium for business insurance Premium for full year
$3,400 for rent Includes $2,000 in rent deposits.
$2,200 for coffee beans Includes coffee discarded valued at $100
$1,600 for coffee cups 0 cups in inventory at the beginning of January. $600 worth of cups still in inventory at the end of month.
$16,100 to employees for payroll $2,200 owed in payroll taxes
$300 of interest on loan Paid mid-month
$1,100 for electricity and water Includes $400 in utility deposits
$11,600 in advertising $2,900 per week billed monthly

Now use the transaction information to create a Accrual-Based Income Statement for January using the following template.

Account Balance
Revenues $
Cost of Goods Sold $
Gross Margin, or Gross Profit $
Expenses
Salaries and Wages $
Rent and Utilities $
Advertising $
Insurance $
Equipment Depreciation $
Interest $
Total Expenses $
Net Income $

Use the Accrual-Based Income Statement you created above to answer the following questions.

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