Questions

$1.$

Below are the twelve transactions that Spicemup BV engages in during the month of

November $2023.$ Provide accurate journal entries for each transaction. Use the chart of

accounts in the Appendix $($not all accounts in the chart must be used$).$

# Date Transaction

$101/$Nov Sold one of the refrigerators for $5,000$ cash. The original cost of the

refrigerator was $9,000$ and accumulated depreciation for the refrigerator

was $4,650.$

$206/$Nov Customer orders for a total of $700$ that were paid in cash in October were

shipped to customers. The cost of the goods sold is $300.$

$309/$Nov The monthly rent expense of $3,200$ was paid in cash.

$410/$Nov The salaries for the month of October are paid $($total amount $4,000).$

$511/$Nov Received payment of $1,900$ from customers to settle accounts receivable.

$614/$Nov Open invoices from suppliers for a total of $1,500$ were paid in cash.

$715/$Nov Received an online order for goods with a sales price of $2,000$ and shipped

the goods to the customer. Credit terms are $10/4,$ n$/30.$ The cost of the

goods sold is $600.$

$817/$Nov Received notice from the customer who purchased goods for $2,000$ on

November $15$ that $20$ bottles were broken on arrival. Agreed on an

allowance of $150.$

$918/$Nov Purchased $50$ of Spicemup BV$\text{'}$s own shares from Tina's parents for a total

of $3,000$ and put them in the Treasury.

$1022/$Nov Written off an account receivable of $200.$

$1128/$Nov Purchased inventory on account for a total of $8,500.$

$1230/$Nov Cash sales to customers for the month amount to $19,000.$ The inventory

value of the goods sold is $12,000.$sells these to consumers and businesses in the Netherlands through its webshop. Spicemup BV

was established in January $2016.$ The corporation currently has two full time employees: Tina

Tabasco and Jeanette Adjuma. Spicemup BV has three owners: $40\%$ of its $1,0000$ shares are

owned by Tina Tabasco, another $40\%$ are owned by Tina's parents, Juan and Marieke Tabasco,

and the remaining $20\%$ are owned by a private equity firm called Firepower Investments Inc.

Spicemup BV accounts for its results on a monthly basis. It uses a perpetual inventory system

based on a FIFO cost flow assumption.

Below is the Statement of Financial Position of Spicemup BV per October $31,2023.$

Assets

Refrigerators

Accumulated Depreciation Refrigerators

IT system

Accumulated Depreciation IT system

Inventory

Prepaid Insurance

Supplies

Accounts Receivable

Allowance for Doubtful Accounts

Investments at fair value

Cash

Total Assets

$31/$Oct

$90,000$

$-46,500$

$12,000$

$-3,750$

$24,000$

$400$

$650$

$2,300$

$-300$

$5,800$

$5,000$

$89,600$

Liabilities

Note Payable

Accounts Payable

Interest Payable

Salaries and Wages Payable

Unearned Revenue

Equity

Share Capital $-$ Ordinary

Share Premium $-$ Ordinary

Treasury Shares

Retained Earnings

Total Liabilities and Equity

$31/0$ct

$20,000$

$1,800$

$400$

$4,000$

$900$

$40,000$

$12,000$

$0$

$10,500$

$89,600$

Additional information:

Both the refrigerators and the IT system are depreciated using the straight$-$line method.

The refrigerators were purchased on September $1,2018$ and are depreciated in $120$

months assuming a residual value of $0.$ The IT system was purchased on August $1$

$2022$ and is depreciated in $36$ months, assuming a residual value of $3,000.$

Prepaid insurance refers to the remaining deferral of a one$-$year fire insurance for the

whole of $2023,$ purchased in December $2022.$

The investments refer to a portfolio of trading shares. The cost of the portfolio was

$2,500.$ Spicemup BV records fair value adjustments on a special account "Fair Value

Adjustment $-$ Trading" and recognizes the unrealized gain or loss in its monthly

income.

Notes payable refers to a $20,0002-$year loan. The note was signed on July $1,2022$ and

was used to finance the purchase of the IT system, among other things. It will need to

be paid back on July $12024.$ The interest rate is $3\%.$ Interest is payments are made

twice per year, on January $1$ and on July $1.$

The par value of Spicemup BV$\text{'}$s shares is $40$ per share.

Salaries and wages for each month are paid on the ${10}^{th}$ of the next month.

Unearned Revenues refers to paid orders from clients that have not yet been shipped.