Question

Unit 3

Cookie Creations (Chapter 3)

Cookie Creations' income, she must first make adjustments.

Natalie puts together the information shown below.

1. A count reveals that $35 of baking supplies were used during November.

2. Natalie estimates that all of her baking equipment will have a useful life of 5 years or 60 months. (Assume Natalie decides to record a full month's worth of depreciation, regardless of when the equipment was obtained by the business.)

3. Natalie's grandmother has decided to charge an interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (Assume that half a month of interest accrued during November.)

4. On November 30, a friend of Natalie's asks her to teach a class at the neighborhood school. Natalie agrees and teaches a group of 35 first-grade students how to make gingerbread cookies. The next day, Natalie prepares an invoice for $300 and leaves it with the school principal. The principal says that he will pass the invoice along to the head office, and it will be paid sometime in December.

5. Natalie receives a utility bill for $45. The bill is for utilities consumed by Natalie's business during November is due December 15.

The trial balance from Chapter 2 is presented below.

Using the trial balance from Chapter 2 and based on the new information provided above, complete the tasks below.

1. Post the adjusting journal entries.

2. Post an adjusted trial balance.

3. Using the adjusted trial balance, calculate Cookie Creations' net income or net loss for the month of November 2019.