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solution of it plz Charlie's Internet Caf Charlie's Internet Cafe (CIC) was established and incorporated on January 1, 2016, by Bruce Waiters and has just
solution of it plz
Charlie's Internet Caf Charlie's Internet Cafe (CIC) was established and incorporated on January 1, 2016, by Bruce Waiters and has just completed its third year of operations with a year end of December 31. Bruce was born in the Muskoka repion and after completing his university degree in history, he decided to return to the area to set up his own business. After months of research, Bruce decided to open his business along the Gravenhurst waterfront His research showed that there was tremendous potential in that area, espectally during the summer tourist season for a small cafe with an Internet service. Local cottagers without service suggested that they would find it appealing to check their email while shopping in the trendy area CIC runs out of 90 square metres (1,000 square feet) of space. It has one entrance into the cafe and patio doors leading out to a deck that overlooks the water. CIC pays $5,000 per month for the rental of the space. Bruce was able to negotiate with the landlord and was not required to pay the first month's rent in advance. All of his rental payments are current and up to date. For the last two years, CIC has had a very reliable accountant prepare its year-end financial statements and everything has been correct. This year, CIC's accountant retired and Bruce did the best he could recording his own financial information. For the information he was not sure about, he kept all of the required supporting documentation. Bruce hired your accounting firm to prepare his financial statements for the year and you were assigned the job Bruce sup- plied you with his unadjusted trial balance and the information in Exhibit Ito assist you. Additional information: The amount currently sitting in prepaids arose due to the insurance policy last year. Bruce didn't know how to correct it, so he left it. This year's insurance policy was purchased on November 1 for $9,000. The policy runs from November 1 to October 31 of each year Bruce has a note that he owed $900 in wages to his employees for the period ending December 31. The loan was incurred when the cafe was opened The loan carries an interest rate of 8%. The interest is payable two months after year end and the principal is due in 2022 CIC will sometimes book special events with small organizations that are allowed to pay after the event has taken place. On December 29, a small company had a gathering at the cafe. The company was billed $1,089 and has 30 days to pay it. Bruce has not yet recorded this in his financial records. > CIC declared a dividend of $5,000 on December 30. 3 Bruce didn't know how to record amortization for the year and so left it for you to record. Amortiza- tion for all assets is charged using a straight-line method by taking the cost of the asset and dividing it by its expected useful life. The assets have expected useful lives as follows Computers: 5 years Caf equipment: 10 years Furniture and fixtures: 20 years >> The information shows that CIC owes S400 for a telephone bill and $300 for electricity for December These amounts have not been recorded yet. Required Based on the information you have prepare the adjusting jounal entries, an adjusted trial balance, the statement of earnings (income statement), statement of financial position (balance sheet), and statement of retained earnings. After you have completed the statements, prepare the closing joumal entries and the post- closing trial balance. Ensure you show all of your work and prepare proper joumal entries and properly formatted financial statements. EXHIBITI Credit 12,000 18,000 15,000 20,000 CHARLIE'S INTERNET CAF UNADJUSTED TRIAL BALANCE DECEMBER 31, 2018 Account Name Debit Cash 30,000 Accounts receivable 5,600 Food inventory 21,000 Merchandise inventory 61,500 Prepaids 3,400 Computers 30,000 Accumulated amortization computers Caf equipment 90,000 Accumulated amortization-Cafe equipment Furniture and fixtures 150.000 Accumulated amortization-Fumature and fixtures Accounts payable Accrued liabilities Interest payable Dividend payable Long-term loan Common shares Retained earnings Food revenue Internet revenue Merchandise revenue Food expense 240,000 Internet expense 54,000 Electricity expense 67,000 Telephone expense 20.000 Interest expense Salary expense 200,000 Insurance expense 9,000 Supplies expense 8.000 Depreciation expense Rent expense 60,000 1.049.500 220,000 50,000 21,000 463,500 127.000 103,000 1,049.500Step by Step Solution
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