So would you add 1169 in the balance sheet under the website asset or would you just leave it as debit to expense and credit to cash. Also I need help to make the bank reconciliation statement for the following case. Could you possibly help me. I tried but I don't get this statement.

Bruno is a creative flower arrangement specialist that has worked for years in a highend florist shop in Rosedale neighborhood in Toronto. The commute to his place of work takes more than 2 hours each way after he moved with his partner to a larger, spacious house in the area of Bracebridge. Now he has decided to open his own florist shop located within walking distance from where he lives. His goal includes making an after tax net profit of at least $2,500 per month which would be similar to the net salary minus transportation costs he was receiving in the high-end florist shop in Yonge St. and Lawn Ave W. Bruno researched similar operations, conducted a market survey and developed a business plan. He determined his business could meet his profitability goal if he were to attend the needs of at least 2 very wealthy individuals. He also determined that for various tax and liability reasons the business should be incorporated. Bruno felt quite comfortable running his companys website that was designed by his friend Marco for $400 and it is up and running by June 1st. The $1,000 paid to Marco included $(use the last 3 digits of your student number here) for domain registration of www.gorgeoustulipcottage.com but does not include upgrades that will have to be made in ten months, so the useful life of the web site content is 10 months. He decided to call his company Gorgeous Tulip. Armed with the business plan and survey results, he visited the Metro Bank and confirmed he would be able to secure a line of credit for $5,000 at 24% per year. He did the paperwork himself and had it all completed and the Business Number registered by the start of business, June 1st, 2016. He paid a total of $500 in fees and other concepts related with setting up his company. Bruno recorded all cash transactions in a journal. His entries for June 1st 2016 through June 30th 2016 are shown on the next page. He used information from this journal, together with his knowledge of the business, and other information presented below, to prepare the financial statements. In terms of setting up his accounting system, Bruno decided on the following records: Chart of Accounts, General Journal used for all adjusting and oddball entries, a Cash journal that combines the Sales and Disbursements Journals. Bruno observed the following conventions when preparing the statements: Adjusting entries were made at the end of the month only, June 30th; amounts receivable and payable are only accrued at June 30th, and his capitalization policy was to expense items that cost less than $100. Cash Journal June 1st to June 30th, 2016 Dat e Jun e 1st Chq # Payee Amou nt Balance Description Brunos contributi on 1.900 $1.900 Brunos initial contribution Bruno and partner 100 $1.800 Rent - garage Bruno and partner 100 $1.700 Utilities Bruno and partner 100 $1.600 Rent car Marco 1000 $600 Web site design Metro bank 2.500 $3.100 Use of line of credit Business Number Org. 500 $2.600 Set up his own company 2 Flowers Bulk Market 50 $2.550 Purchase of fresh flowers 3 Florist Paradise 2000 $550 Purchase of dry supplies Jun e 4th Bruno 15 $565 Revenue flowers Jun e 5th Bruno 140 $705 Revenue simple arrangement Jun e 6th Bruno 15 $720 Revenue flowers Jun e 7th Bruno 130 $850 Revenue complex arrangement Flowers Bulk Mart 500 $350 Purchase of fresh flowers 1 Jun e 4 8th Bruno 100 $450 Revenue flowers and arrangements Jun e 9th Bruno 300 $750 Revenue flowers and arrangements Jun e 10t h Bruno 360 $1.110 Revenue flowers and arrangements Jun e 11t h Bruno 140 $1.250 Revenue flowers and arrangements Jun e 12t h Bruno 25 $1.275 Revenue flowers and arrangements Flowers Bulk Mart 500 $775 Purchase of fresh flowers Bruno 320 $1.095 Revenue flowers and arrangements Jun e 16t h Bruno 440 $1.535 Revenue flowers and arrangements Jun e 17t h Bruno 40 $1.575 Revenue flowers and arrangements Bruno 340 $1.915 Revenue flowers and arrangements Jun e 15t h Jun e 18t 5 h Jun e 19t h Bruno 530 $2.445 Revenue flowers and arrangements Flowers Bulk Mart 500 $1.945 Purchase of fresh flowers Bruno 400 $2.345 Revenue flowers and arrangements Jun e 23t h Bruno 100 $2.445 Revenue flowers and arrangements Jun e 24t h Bruno 400 $2.845 Revenue flowers and arrangements Jun e 25t h Bruno 600 $3.445 Revenue flowers and arrangements Jun e 26t h Bruno 200 $3.645 Revenue flowers and arrangements Flowers Bulk Mart 500 $3.145 Purchase of fresh flowers Bruno 505 $3.650 Revenue flowers and arrangements Jun e 22t h Jun e 29t h Jun e 30t h 6 7 Bruno TBD End of month cash that must be available ???? Dividends $5,145 minus the dividends paid on June 30th Other information (which may or may not be relevant to your bookkeeping activities) The following information is provided in a narrative format. Some of it may not be needed to complete the required. A skill set accountants must develop is being able to differentiate information that is relevant and requires recognition in the financial statements from that which does not. 1.Bank Loan: Brunos business used a portion from the approved line of credit on June 1st. By June 30th the amount owed was still outstanding. 2.Bruno is the owner: On June 1st Gorgeous Tulip issues 10 shares to Bruno in exchange for $1,900. 3.Rent: Bruno is using a detached garage of her house as the basis of her operations. As rent he pays himself and his partner a symbolic amount of $100 per month. Another $100 are paid in concept of the business share of utilities including the telephone land line. 4.Furniture and hand tools: Bruno did not purchase any new furniture or equipment as all the elements he has for his hobby as a florist at home are now used in his business. 5.Car: Bruno has a Jeep under his name that he uses to bring in materials and to make deliveries. He pays a symbolic rent for using it of $100 per month, gas included. 6.Supplies: Brunos supplies are of two kinds: dry and wet. Dry supplies such as dirt, pots, ribbons and other decorative elements can stay in his inventory for long periods of time. Wet supplies are flowers and other living ornaments, they can stay in inventory only for a couple of days; therefore, he has decided to treat them as expenses when purchased. 7.Revenue: minor floral arrangements are paid in cash, but those more elaborated and expensive are normally paid by credit or debit card. The table below shows the number of floral arrangements made each week per type of work done (ignore credit card fees and HST). 8.Accounts Receivables: At June 30th, Gorgeous Tulip was owed $1,500 by Mr. Bill Gates, a very wealthy person that has just moved in to a large and secluded cottage in the Week June 17 Flower s 2 June 8 14 7 Simple Complex Cash Credit/Debit cash receipts arrange ments arrange ments receipts 1 1 $100 6 2 $220 $705 Credit/D ebit cards receipts 200 June 15-21 10 16 2 $370 $1.300 June 22-28 8 14 3 $200 $1.500 June 29-30 11 2 1 $55 $450 Total 38 39 9 $ 945 $ 4.155 area. He knows Mr. Gates will pay him when he hands in the summary for the floral arrangements done and delivered in the month of June. 9.Dividends: Bruno projected that dividends can be paid to him by June 30th. Dividends declared and paid on Bruno's 10 shares are not shown in the cash journal but they were effectively paid on June 30th right before midnight. No other amounts were paid or owed to Bruno. Note: make the amount of dividends paid per share equal to the triple of the last 2 digits of your student number. 10.Errors: Bruno has a difference between his cash journal and the money he has at hand. He remembered that on June 12th he paid that amount for a delivery that he was unable to make. Note: make the difference between the two amounts equal to the double of the last 2 digits of your student number. 11.Dry supplies at hand: On June 30th Bruno estimated that he still has dry supplies in stock for an amount equivalent to the last 3 digits of your student number. 12.Income tax: Bruno estimated that the income tax accrued for the first month is $200. 13.Line of credit: Bruno is highly interested in paying back the line of credit, so he plans to take directly to the bank the collection of $1,500 from Mr. Gates. 14.Accountants fees: Marco, who is also an accountant, has advised Bruno to set aside some money so he can pay him for his accounting services for the year. Marco normally $200 $705 charges $600 per year to provide full accounting services to small businesses; those services include the annual income tax and HST preparation among others. Sheet1 CHARTS OF ACCOUNT Account name Code Cash Accounts Receivable Merchandise Inventory Website Accumulated depreciation-website Bank loan- Line of Credit Interest Payable Income tax payable Retained earning Sales Common Share Accounting fee expense Utilities expense Car rent expense Income tax expense Business setup expense Domain cost Miscellaneous expense Cost of Goods Sold Delivery Cost Garage Rent expense Supplies Expense Dividends expense Interest expense Depreciation expense Type of account 101 Current Asset 102 Current Asset 103 Current Asset 104 Current Asset 105 Contra Asset 201 Liability 202 Liability 203 Liability 301 Equity 302 Equity 303 Equity 401 Expense 402 Expense 403 Expense 404 Expense 405 Expense 406 Expense 407 Expense 408 Expense 409 Expense 410 Expense 411 Expense 412 Expense 413 Expense 414 Expense Normal Balance debit debit debit debit credit credit credit credit credit credit credit debit debit debit debit debit debit debit debit debit debit debit debit debit debit Date (2017) June 1 1 1 1 1 1 1 Bank Reconciliation: There is not enough information provided to make a bank reconciliation. The case does not give information for the bank statement. We do not know the unadjusted bank statement balance or if there are any bank charges or NSF charges that they added. There is no information about any outstanding cheques or deposits that the bank statement has not included. There is no information about any automatic expenses that have been taken out and are not included in the cash book balance. 1 1 4 5 6 7 Page 1 Sheet1 General Journal Account title and Explanation Cash Common share Ref 101 304 Debit Credit 1900 1900 to record the issue of 10 shares at $1900 Garage Rent expense Cash 410 101 100 402 101 100 403 101 100 406 407 101 1000 169 101 201 2500 100 to record the garage rent given Utilities Expense Cash 100 to record utilities paid Car rent expense Cash 100 to record the car rent paid Domain cost Miscellaneous expense Cash 1169 to record the website design and set up cost and paid by cheque (#1) Cash Bank loan - Line of credit 2500 to record the use of line of credit Business set up expense Cash 405 101 500 411 101 Sales 50 Sales 103 101 Sales 2000 Acc-Dep Website 116.9 101 302 15 101 302 140 101 302 15 101 302 130 15 140 15 to record the sale of flowers Cash Sales 1231 2000 to record the sale of flowers - simple arrangement Cash Merchandise Inventory 2000 769 to record the sale of flowers Cash A/R 50 to record the purchase of inventory Cash 8227 1500 to record the purchase of fresh flowers by cheque (#2) Merchandise Inventory Cash 100 100 100 1169 500 50 2000 500 500 500 500 2070 138 500 to record the fees paid to set the business Supplies expense Cash Assets Cash 1900 2500 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 9500 1273 Page 2 130 Sheet1 T- Accounts Liability Bank Loan -LOC 2500 Expense Utilities Expense 100 Interest Payable 50 Car rent expense 100 Income tax Payable Income tax expense Gorgeous Tulip Inc. Trial Balance Ended June 30, 2017 Account Title Cash Accounts Receivable Merchandise Inventory Debit 1273 1500 769 Acc-Depreciation -Website 200 Equity Common Share 1900 200 Business setup expense 500 Domain Cost 1000 Sales 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 1500 6600 Bank loan - LOC Interest payable Income tax payable Sales Common Share Utilities expense Car rent expense Income tax expense Business setup expense Garage rent expense 100 Dividend expense 2070 Interest expense 50 Depreciation Expense 116.9 Misc. expense 169 Delivery Cost 138 COGS 1231 Supplies Expense 50 500 500 500 500 2050 Page 3 Domain cost Miscellaneous expense COGS Delivery cost Garage rent expense Supplies expense Dividends expense Interest expense Depreciation expense Total 100 100 200 500 1000 169 1231 138 100 2050 2070 50 116.9 $11,366.90 Sheet1 Gorgeous Tulip Inc. Income Statement Month ended June 30,2017 Credit 116.9 2500 50 200 6600 1900 Gorgeous Tulip Inc. Statement of Owner's Equity Month ended June 30, 2017 Revenue Sales Expenses: Utilities expense Car rent expense Income tax exp. Business setup exp. Domain cost Misc. expense COGS Delivery cost Garage rent exp. Supplies expense Interest expense Depreciation exp. Net Income 6600 Bruno, Capital June 1,2017 Add: Net Income Bruno, Capital June 30,2017 100 100 200 500 1000 169 1231 138 100 2050 50 116.9 5754.9 $845.10 Note: Assumption: The depreciation expense is not added in the income statement. $11,366.90 Page 4 Sheet1 p Inc. r's Equity 30, 2017 Gorgeous Tulip Inc. Statement of Retained Earnings For Month ended June 30, 2017 7 17 845.1 $845.10 Retained earning, June 1, 2017 Net Income Common Shares dividends Retained earning, June 30, 2017 Page 5 845.1 -2070 -$1,224.90 Sheet1 Gorgeous Tulip Inc. Balance Sheet Ended June 30,2017 Asset Cash A/R Merchandise Inventory Acc-Depreciation -Website $1,273.00 $1,500.00 $769.00 -116.9 Memo: Liabilities Interest payable Income Tax payable bank loan -LOC Total liabilities Owner's equity Retained earning Common Share Total OE Total Assets $3,425.10 Total liabilities &OE Page 6 $50.00 $200.00 $2,500.00 $2,750.00 -$1,224.90 $1,900.00 $645.10 $3,425.10 To: Gorgeous Tulip Inc. From: The Professional Date: June 30, 2017 Re: Evaluation of Busines After analyzing all the dividends Sheet1 lip Inc. sional Accountant 17 Business g all the Financial Statements the total amount of dends that can be paid is $ 2070.00. Page 7 Sheet1 8 8 9 10 11 12 15 15 16 17 18 19 22 22 Page 8 Sheet1 to record the sale of flowers - complex arrangement Supplies expense Cash 411 101 500 101 302 100 101 302 300 101 302 360 101 302 140 101 302 25 411 101 500 101 302 320 101 302 440 101 302 40 101 302 340 101 302 530 411 101 500 101 400 500 to record the purchase of fresh flowers by cheque (#4) Cash Sales 100 to record the sale of flowers and arrangement Cash Sales 300 to record the sale of flowers and arrangement Cash Sales 360 to record the sale of flowers and arrangement Cash Sales 140 to record the sale of flowers and arrangement Cash Sales 25 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#5) Cash Sales 320 to record the sale of flowers and arrangement Cash Sales 440 to record the sale of flowers and arrangement Cash Sales 40 to record the sale of flowers and arrangement Cash Sales 340 to record the sale of flowers and arrangement Cash Sales 530 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#6) Cash Page 9 Sheet1 Page 10 Sheet1 Page 11 Sheet1 Page 12 Sheet1 Page 13 Sheet1 Page 14 Sheet1 23 24 25 26 29 30 30 30 30 30 30 30 30 Page 15 Sheet1 Sales 302 400 to record the sale of flowers and arrangement Cash Sales 101 302 100 101 302 400 101 302 600 101 302 200 411 101 500 101 302 505 412 101 2070 413 202 50 102 302 1500 409 101 138 105 414 116.9 408 103 1231 404 203 200 100 to record the sale of flowers and arrangement Cash Sales 400 to record the sale of flowers and arrangement Cash Sales 600 to record the sale of flowers and arrangement Cash Sales 200 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#7) Cash Sales 505 to record the sale of flowers and arrangement Dividend expense Cash 2070 to record the dividends paid Interest Expense Interest payable 50 to record the interest payable for LOC Account Receivable Sales 1500 to record the service delivered to Mr. Gates Delivery cost Cash 138 to record the amount paid for delivery done by someone else Depreciation expense Acc-Dep- website 116.9 to record the depreciation of the website Cost of goods sold Merchandise Inventory 1231 to record the use of inventory for the month Income tax expense Income tax payable to record the income tax accrued for the month Page 16 200 Sheet1 Page 17 Sheet1 Page 18 Sheet1 Page 19 Sheet1 Page 20 Sheet1 Page 21 Sheet1 CHARTS OF ACCOUNT Account name Code Cash Accounts Receivable Merchandise Inventory Website Accumulated depreciation-website Bank loan- Line of Credit Interest Payable Income tax payable Retained earning Sales Common Share Accounting fee expense Utilities expense Car rent expense Income tax expense Business setup expense Domain cost Miscellaneous expense Cost of Goods Sold Delivery Cost Garage Rent expense Supplies Expense Dividends expense Interest expense Depreciation expense Type of account 101 Current Asset 102 Current Asset 103 Current Asset 104 Current Asset 105 Contra Asset 201 Liability 202 Liability 203 Liability 301 Equity 302 Equity 303 Equity 401 Expense 402 Expense 403 Expense 404 Expense 405 Expense 406 Expense 407 Expense 408 Expense 409 Expense 410 Expense 411 Expense 412 Expense 413 Expense 414 Expense Normal Balance debit debit debit debit credit credit credit credit credit credit credit debit debit debit debit debit debit debit debit debit debit debit debit debit debit Date (2017) June 1 1 1 1 1 1 1 Bank Reconciliation: There is not enough information provided to make a bank reconciliation. The case does not give information for the bank statement. We do not know the unadjusted bank statement balance or if there are any bank charges or NSF charges that they added. There is no information about any outstanding cheques or deposits that the bank statement has not included. There is no information about any automatic expenses that have been taken out and are not included in the cash book balance. 1 1 4 5 6 7 Page 1 Sheet1 General Journal Account title and Explanation Cash Common share Ref 101 304 Debit Credit 1900 1900 to record the issue of 10 shares at $1900 Garage Rent expense Cash 410 101 100 402 101 100 403 101 100 406 407 101 1000 169 101 201 2500 100 to record the garage rent given Utilities Expense Cash 100 to record utilities paid Car rent expense Cash 100 to record the car rent paid Domain cost Miscellaneous expense Cash 1169 to record the website design and set up cost and paid by cheque (#1) Cash Bank loan - Line of credit 2500 to record the use of line of credit Business set up expense Cash 405 101 500 411 101 Sales 50 Sales 103 101 Sales 2000 Acc-Dep Website 116.9 101 302 15 101 302 140 101 302 15 101 302 130 15 140 15 to record the sale of flowers Cash Sales 1231 2000 to record the sale of flowers - simple arrangement Cash Merchandise Inventory 2000 769 to record the sale of flowers Cash A/R 50 to record the purchase of inventory Cash 8227 1500 to record the purchase of fresh flowers by cheque (#2) Merchandise Inventory Cash 100 100 100 1169 500 50 2000 500 500 500 500 2070 138 500 to record the fees paid to set the business Supplies expense Cash Assets Cash 1900 2500 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 9500 1273 Page 2 130 Sheet1 T- Accounts Liability Bank Loan -LOC 2500 Expense Utilities Expense 100 Interest Payable 50 Car rent expense 100 Income tax Payable Income tax expense Gorgeous Tulip Inc. Trial Balance Ended June 30, 2017 Account Title Cash Accounts Receivable Merchandise Inventory Debit 1273 1500 769 Acc-Depreciation -Website 200 Equity Common Share 1900 200 Business setup expense 500 Domain Cost 1000 Sales 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 1500 6600 Bank loan - LOC Interest payable Income tax payable Sales Common Share Utilities expense Car rent expense Income tax expense Business setup expense Garage rent expense 100 Dividend expense 2070 Interest expense 50 Depreciation Expense 116.9 Misc. expense 169 Delivery Cost 138 COGS 1231 Supplies Expense 50 500 500 500 500 2050 Page 3 Domain cost Miscellaneous expense COGS Delivery cost Garage rent expense Supplies expense Dividends expense Interest expense Depreciation expense Total 100 100 200 500 1000 169 1231 138 100 2050 2070 50 116.9 $11,366.90 Sheet1 Gorgeous Tulip Inc. Income Statement Month ended June 30,2017 Credit 116.9 2500 50 200 6600 1900 Gorgeous Tulip Inc. Statement of Owner's Equity Month ended June 30, 2017 Revenue Sales Expenses: Utilities expense Car rent expense Income tax exp. Business setup exp. Domain cost Misc. expense COGS Delivery cost Garage rent exp. Supplies expense Interest expense Depreciation exp. Net Income 6600 Bruno, Capital June 1,2017 Add: Net Income Bruno, Capital June 30,2017 100 100 200 500 1000 169 1231 138 100 2050 50 116.9 5754.9 $845.10 Note: Assumption: The depreciation expense is not added in the income statement. $11,366.90 Page 4 Sheet1 p Inc. r's Equity 30, 2017 Gorgeous Tulip Inc. Statement of Retained Earnings For Month ended June 30, 2017 7 17 845.1 $845.10 Retained earning, June 1, 2017 Net Income Common Shares dividends Retained earning, June 30, 2017 Page 5 845.1 -2070 -$1,224.90 Sheet1 Gorgeous Tulip Inc. Balance Sheet Ended June 30,2017 Asset Cash A/R Merchandise Inventory Acc-Depreciation -Website $1,273.00 $1,500.00 $769.00 -116.9 Memo: Liabilities Interest payable Income Tax payable bank loan -LOC Total liabilities Owner's equity Retained earning Common Share Total OE Total Assets $3,425.10 Total liabilities &OE Page 6 $50.00 $200.00 $2,500.00 $2,750.00 -$1,224.90 $1,900.00 $645.10 $3,425.10 To: Gorgeous Tulip Inc. From: The Professional Date: June 30, 2017 Re: Evaluation of Busines After analyzing all the dividends Sheet1 lip Inc. sional Accountant 17 Business g all the Financial Statements the total amount of dends that can be paid is $ 2070.00. Page 7 Sheet1 8 8 9 10 11 12 15 15 16 17 18 19 22 22 Page 8 Sheet1 to record the sale of flowers - complex arrangement Supplies expense Cash 411 101 500 101 302 100 101 302 300 101 302 360 101 302 140 101 302 25 411 101 500 101 302 320 101 302 440 101 302 40 101 302 340 101 302 530 411 101 500 101 400 500 to record the purchase of fresh flowers by cheque (#4) Cash Sales 100 to record the sale of flowers and arrangement Cash Sales 300 to record the sale of flowers and arrangement Cash Sales 360 to record the sale of flowers and arrangement Cash Sales 140 to record the sale of flowers and arrangement Cash Sales 25 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#5) Cash Sales 320 to record the sale of flowers and arrangement Cash Sales 440 to record the sale of flowers and arrangement Cash Sales 40 to record the sale of flowers and arrangement Cash Sales 340 to record the sale of flowers and arrangement Cash Sales 530 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#6) Cash Page 9 Sheet1 Page 10 Sheet1 Page 11 Sheet1 Page 12 Sheet1 Page 13 Sheet1 Page 14 Sheet1 23 24 25 26 29 30 30 30 30 30 30 30 30 Page 15 Sheet1 Sales 302 400 to record the sale of flowers and arrangement Cash Sales 101 302 100 101 302 400 101 302 600 101 302 200 411 101 500 101 302 505 412 101 2070 413 202 50 102 302 1500 409 101 138 105 414 116.9 408 103 1231 404 203 200 100 to record the sale of flowers and arrangement Cash Sales 400 to record the sale of flowers and arrangement Cash Sales 600 to record the sale of flowers and arrangement Cash Sales 200 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#7) Cash Sales 505 to record the sale of flowers and arrangement Dividend expense Cash 2070 to record the dividends paid Interest Expense Interest payable 50 to record the interest payable for LOC Account Receivable Sales 1500 to record the service delivered to Mr. Gates Delivery cost Cash 138 to record the amount paid for delivery done by someone else Depreciation expense Acc-Dep- website 116.9 to record the depreciation of the website Cost of goods sold Merchandise Inventory 1231 to record the use of inventory for the month Income tax expense Income tax payable to record the income tax accrued for the month Page 16 200 Sheet1 Page 17 Sheet1 Page 18 Sheet1 Page 19 Sheet1 Page 20 Sheet1 Page 21 Sheet1 CHARTS OF ACCOUNT Account name Code Cash Accounts Receivable Merchandise Inventory Website Accumulated depreciation-website Bank loan- Line of Credit Interest Payable Income tax payable Retained earning Sales Common Share Accounting fee expense Utilities expense Car rent expense Income tax expense Business setup expense Domain cost Miscellaneous expense Cost of Goods Sold Delivery Cost Garage Rent expense Supplies Expense Dividends expense Interest expense Depreciation expense Type of account 101 Current Asset 102 Current Asset 103 Current Asset 104 Current Asset 105 Contra Asset 201 Liability 202 Liability 203 Liability 301 Equity 302 Equity 303 Equity 401 Expense 402 Expense 403 Expense 404 Expense 405 Expense 406 Expense 407 Expense 408 Expense 409 Expense 410 Expense 411 Expense 412 Expense 413 Expense 414 Expense Normal Balance debit debit debit debit credit credit credit credit credit credit credit debit debit debit debit debit debit debit debit debit debit debit debit debit debit Date (2017) June 1 1 1 1 1 1 1 Bank Reconciliation: There is not enough information provided to make a bank reconciliation. The case does not give information for the bank statement. We do not know the unadjusted bank statement balance or if there are any bank charges or NSF charges that they added. There is no information about any outstanding cheques or deposits that the bank statement has not included. There is no information about any automatic expenses that have been taken out and are not included in the cash book balance. 1 1 4 5 6 7 Page 1 Sheet1 General Journal Account title and Explanation Cash Common share Ref 101 304 Debit Credit 1900 1900 to record the issue of 10 shares at $1900 Garage Rent expense Cash 410 101 100 402 101 100 403 101 100 406 407 101 1000 169 101 201 2500 100 to record the garage rent given Utilities Expense Cash 100 to record utilities paid Car rent expense Cash 100 to record the car rent paid Domain cost Miscellaneous expense Cash 1169 to record the website design and set up cost and paid by cheque (#1) Cash Bank loan - Line of credit 2500 to record the use of line of credit Business set up expense Cash 405 101 500 411 101 Sales 50 Sales 103 101 Sales 2000 Acc-Dep Website 116.9 101 302 15 101 302 140 101 302 15 101 302 130 15 140 15 to record the sale of flowers Cash Sales 1231 2000 to record the sale of flowers - simple arrangement Cash Merchandise Inventory 2000 769 to record the sale of flowers Cash A/R 50 to record the purchase of inventory Cash 8227 1500 to record the purchase of fresh flowers by cheque (#2) Merchandise Inventory Cash 100 100 100 1169 500 50 2000 500 500 500 500 2070 138 500 to record the fees paid to set the business Supplies expense Cash Assets Cash 1900 2500 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 9500 1273 Page 2 130 Sheet1 T- Accounts Liability Bank Loan -LOC 2500 Expense Utilities Expense 100 Interest Payable 50 Car rent expense 100 Income tax Payable Income tax expense Gorgeous Tulip Inc. Trial Balance Ended June 30, 2017 Account Title Cash Accounts Receivable Merchandise Inventory Debit 1273 1500 769 Acc-Depreciation -Website 200 Equity Common Share 1900 200 Business setup expense 500 Domain Cost 1000 Sales 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 1500 6600 Bank loan - LOC Interest payable Income tax payable Sales Common Share Utilities expense Car rent expense Income tax expense Business setup expense Garage rent expense 100 Dividend expense 2070 Interest expense 50 Depreciation Expense 116.9 Misc. expense 169 Delivery Cost 138 COGS 1231 Supplies Expense 50 500 500 500 500 2050 Page 3 Domain cost Miscellaneous expense COGS Delivery cost Garage rent expense Supplies expense Dividends expense Interest expense Depreciation expense Total 100 100 200 500 1000 169 1231 138 100 2050 2070 50 116.9 $11,366.90 Sheet1 Gorgeous Tulip Inc. Income Statement Month ended June 30,2017 Credit 116.9 2500 50 200 6600 1900 Gorgeous Tulip Inc. Statement of Owner's Equity Month ended June 30, 2017 Revenue Sales Expenses: Utilities expense Car rent expense Income tax exp. Business setup exp. Domain cost Misc. expense COGS Delivery cost Garage rent exp. Supplies expense Interest expense Depreciation exp. Net Income 6600 Bruno, Capital June 1,2017 Add: Net Income Bruno, Capital June 30,2017 100 100 200 500 1000 169 1231 138 100 2050 50 116.9 5754.9 $845.10 Note: Assumption: The depreciation expense is not added in the income statement. $11,366.90 Page 4 Sheet1 p Inc. r's Equity 30, 2017 Gorgeous Tulip Inc. Statement of Retained Earnings For Month ended June 30, 2017 7 17 845.1 $845.10 Retained earning, June 1, 2017 Net Income Common Shares dividends Retained earning, June 30, 2017 Page 5 845.1 -2070 -$1,224.90 Sheet1 Gorgeous Tulip Inc. Balance Sheet Ended June 30,2017 Asset Cash A/R Merchandise Inventory Acc-Depreciation -Website $1,273.00 $1,500.00 $769.00 -116.9 Memo: Liabilities Interest payable Income Tax payable bank loan -LOC Total liabilities Owner's equity Retained earning Common Share Total OE Total Assets $3,425.10 Total liabilities &OE Page 6 $50.00 $200.00 $2,500.00 $2,750.00 -$1,224.90 $1,900.00 $645.10 $3,425.10 To: Gorgeous Tulip Inc. From: The Professional Date: June 30, 2017 Re: Evaluation of Busines After analyzing all the dividends Sheet1 lip Inc. sional Accountant 17 Business g all the Financial Statements the total amount of dends that can be paid is $ 2070.00. Page 7 Sheet1 8 8 9 10 11 12 15 15 16 17 18 19 22 22 Page 8 Sheet1 to record the sale of flowers - complex arrangement Supplies expense Cash 411 101 500 101 302 100 101 302 300 101 302 360 101 302 140 101 302 25 411 101 500 101 302 320 101 302 440 101 302 40 101 302 340 101 302 530 411 101 500 101 400 500 to record the purchase of fresh flowers by cheque (#4) Cash Sales 100 to record the sale of flowers and arrangement Cash Sales 300 to record the sale of flowers and arrangement Cash Sales 360 to record the sale of flowers and arrangement Cash Sales 140 to record the sale of flowers and arrangement Cash Sales 25 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#5) Cash Sales 320 to record the sale of flowers and arrangement Cash Sales 440 to record the sale of flowers and arrangement Cash Sales 40 to record the sale of flowers and arrangement Cash Sales 340 to record the sale of flowers and arrangement Cash Sales 530 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#6) Cash Page 9 Sheet1 Page 10 Sheet1 Page 11 Sheet1 Page 12 Sheet1 Page 13 Sheet1 Page 14 Sheet1 23 24 25 26 29 30 30 30 30 30 30 30 30 Page 15 Sheet1 Sales 302 400 to record the sale of flowers and arrangement Cash Sales 101 302 100 101 302 400 101 302 600 101 302 200 411 101 500 101 302 505 412 101 2070 413 202 50 102 302 1500 409 101 138 105 414 116.9 408 103 1231 404 203 200 100 to record the sale of flowers and arrangement Cash Sales 400 to record the sale of flowers and arrangement Cash Sales 600 to record the sale of flowers and arrangement Cash Sales 200 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#7) Cash Sales 505 to record the sale of flowers and arrangement Dividend expense Cash 2070 to record the dividends paid Interest Expense Interest payable 50 to record the interest payable for LOC Account Receivable Sales 1500 to record the service delivered to Mr. Gates Delivery cost Cash 138 to record the amount paid for delivery done by someone else Depreciation expense Acc-Dep- website 116.9 to record the depreciation of the website Cost of goods sold Merchandise Inventory 1231 to record the use of inventory for the month Income tax expense Income tax payable to record the income tax accrued for the month Page 16 200 Sheet1 Page 17 Sheet1 Page 18 Sheet1 Page 19 Sheet1 Page 20 Sheet1 Page 21 Sheet1 CHARTS OF ACCOUNT Account name Code Cash Accounts Receivable Merchandise Inventory Website Accumulated depreciation-website Bank loan- Line of Credit Interest Payable Income tax payable Retained earning Sales Common Share Accounting fee expense Utilities expense Car rent expense Income tax expense Business setup expense Domain cost Miscellaneous expense Cost of Goods Sold Delivery Cost Garage Rent expense Supplies Expense Dividends expense Interest expense Depreciation expense Type of account 101 Current Asset 102 Current Asset 103 Current Asset 104 Current Asset 105 Contra Asset 201 Liability 202 Liability 203 Liability 301 Equity 302 Equity 303 Equity 401 Expense 402 Expense 403 Expense 404 Expense 405 Expense 406 Expense 407 Expense 408 Expense 409 Expense 410 Expense 411 Expense 412 Expense 413 Expense 414 Expense Normal Balance debit debit debit debit credit credit credit credit credit credit credit debit debit debit debit debit debit debit debit debit debit debit debit debit debit Date (2017) June 1 1 1 1 1 1 1 Bank Reconciliation: There is not enough information provided to make a bank reconciliation. The case does not give information for the bank statement. We do not know the unadjusted bank statement balance or if there are any bank charges or NSF charges that they added. There is no information about any outstanding cheques or deposits that the bank statement has not included. There is no information about any automatic expenses that have been taken out and are not included in the cash book balance. 1 1 4 5 6 7 Page 1 Sheet1 General Journal Account title and Explanation Cash Common share Ref 101 304 Debit Credit 1900 1900 to record the issue of 10 shares at $1900 Garage Rent expense Cash 410 101 100 402 101 100 403 101 100 406 407 101 1000 169 101 201 2500 100 to record the garage rent given Utilities Expense Cash 100 to record utilities paid Car rent expense Cash 100 to record the car rent paid Domain cost Miscellaneous expense Cash 1169 to record the website design and set up cost and paid by cheque (#1) Cash Bank loan - Line of credit 2500 to record the use of line of credit Business set up expense Cash 405 101 500 411 101 Sales 50 Sales 103 101 Sales 2000 Acc-Dep Website 116.9 101 302 15 101 302 140 101 302 15 101 302 130 15 140 15 to record the sale of flowers Cash Sales 1231 2000 to record the sale of flowers - simple arrangement Cash Merchandise Inventory 2000 769 to record the sale of flowers Cash A/R 50 to record the purchase of inventory Cash 8227 1500 to record the purchase of fresh flowers by cheque (#2) Merchandise Inventory Cash 100 100 100 1169 500 50 2000 500 500 500 500 2070 138 500 to record the fees paid to set the business Supplies expense Cash Assets Cash 1900 2500 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 9500 1273 Page 2 130 Sheet1 T- Accounts Liability Bank Loan -LOC 2500 Expense Utilities Expense 100 Interest Payable 50 Car rent expense 100 Income tax Payable Income tax expense Gorgeous Tulip Inc. Trial Balance Ended June 30, 2017 Account Title Cash Accounts Receivable Merchandise Inventory Debit 1273 1500 769 Acc-Depreciation -Website 200 Equity Common Share 1900 200 Business setup expense 500 Domain Cost 1000 Sales 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 1500 6600 Bank loan - LOC Interest payable Income tax payable Sales Common Share Utilities expense Car rent expense Income tax expense Business setup expense Garage rent expense 100 Dividend expense 2070 Interest expense 50 Depreciation Expense 116.9 Misc. expense 169 Delivery Cost 138 COGS 1231 Supplies Expense 50 500 500 500 500 2050 Page 3 Domain cost Miscellaneous expense COGS Delivery cost Garage rent expense Supplies expense Dividends expense Interest expense Depreciation expense Total 100 100 200 500 1000 169 1231 138 100 2050 2070 50 116.9 $11,366.90 Sheet1 Gorgeous Tulip Inc. Income Statement Month ended June 30,2017 Credit 116.9 2500 50 200 6600 1900 Gorgeous Tulip Inc. Statement of Owner's Equity Month ended June 30, 2017 Revenue Sales Expenses: Utilities expense Car rent expense Income tax exp. Business setup exp. Domain cost Misc. expense COGS Delivery cost Garage rent exp. Supplies expense Interest expense Depreciation exp. Net Income 6600 Bruno, Capital June 1,2017 Add: Net Income Bruno, Capital June 30,2017 100 100 200 500 1000 169 1231 138 100 2050 50 116.9 5754.9 $845.10 Note: Assumption: The depreciation expense is not added in the income statement. $11,366.90 Page 4 Sheet1 p Inc. r's Equity 30, 2017 Gorgeous Tulip Inc. Statement of Retained Earnings For Month ended June 30, 2017 7 17 845.1 $845.10 Retained earning, June 1, 2017 Net Income Common Shares dividends Retained earning, June 30, 2017 Page 5 845.1 -2070 -$1,224.90 Sheet1 Gorgeous Tulip Inc. Balance Sheet Ended June 30,2017 Asset Cash A/R Merchandise Inventory Acc-Depreciation -Website $1,273.00 $1,500.00 $769.00 -116.9 Memo: Liabilities Interest payable Income Tax payable bank loan -LOC Total liabilities Owner's equity Retained earning Common Share Total OE Total Assets $3,425.10 Total liabilities &OE Page 6 $50.00 $200.00 $2,500.00 $2,750.00 -$1,224.90 $1,900.00 $645.10 $3,425.10 To: Gorgeous Tulip Inc. From: The Professional Date: June 30, 2017 Re: Evaluation of Busines After analyzing all the dividends Sheet1 lip Inc. sional Accountant 17 Business g all the Financial Statements the total amount of dends that can be paid is $ 2070.00. Page 7 Sheet1 8 8 9 10 11 12 15 15 16 17 18 19 22 22 Page 8 Sheet1 to record the sale of flowers - complex arrangement Supplies expense Cash 411 101 500 101 302 100 101 302 300 101 302 360 101 302 140 101 302 25 411 101 500 101 302 320 101 302 440 101 302 40 101 302 340 101 302 530 411 101 500 101 400 500 to record the purchase of fresh flowers by cheque (#4) Cash Sales 100 to record the sale of flowers and arrangement Cash Sales 300 to record the sale of flowers and arrangement Cash Sales 360 to record the sale of flowers and arrangement Cash Sales 140 to record the sale of flowers and arrangement Cash Sales 25 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#5) Cash Sales 320 to record the sale of flowers and arrangement Cash Sales 440 to record the sale of flowers and arrangement Cash Sales 40 to record the sale of flowers and arrangement Cash Sales 340 to record the sale of flowers and arrangement Cash Sales 530 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#6) Cash Page 9 Sheet1 Page 10 Sheet1 Page 11 Sheet1 Page 12 Sheet1 Page 13 Sheet1 Page 14 Sheet1 23 24 25 26 29 30 30 30 30 30 30 30 30 Page 15 Sheet1 Sales 302 400 to record the sale of flowers and arrangement Cash Sales 101 302 100 101 302 400 101 302 600 101 302 200 411 101 500 101 302 505 412 101 2070 413 202 50 102 302 1500 409 101 138 105 414 116.9 408 103 1231 404 203 200 100 to record the sale of flowers and arrangement Cash Sales 400 to record the sale of flowers and arrangement Cash Sales 600 to record the sale of flowers and arrangement Cash Sales 200 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#7) Cash Sales 505 to record the sale of flowers and arrangement Dividend expense Cash 2070 to record the dividends paid Interest Expense Interest payable 50 to record the interest payable for LOC Account Receivable Sales 1500 to record the service delivered to Mr. Gates Delivery cost Cash 138 to record the amount paid for delivery done by someone else Depreciation expense Acc-Dep- website 116.9 to record the depreciation of the website Cost of goods sold Merchandise Inventory 1231 to record the use of inventory for the month Income tax expense Income tax payable to record the income tax accrued for the month Page 16 200 Sheet1 Page 17 Sheet1 Page 18 Sheet1 Page 19 Sheet1 Page 20 Sheet1 Page 21