Take Coffee will locate nearby are of crossing three universities, backside of HUFS, 264-207 Imun-dong, Dongdaemun-gu, Seoul. We will rent approximately 100 square meter area with seating for 20-30 patrons/clients. The rent is 1,5 million KRW a month, with a five-year lease available. By the contract with tenant I paid the rent for first 4 months in total: 6 mln KRW. The Renovation and new floor constructions & interior designing will cost 8 mln KRW. (Premises remodeling)
The following equipment and inventories/furniture cost 35 mln KRW

Other miscellaneous expenses 1 mln KRW.
Legal expenses for obtaining licenses and permits cost 200,000 KRW.

Monthly we expect to purchase raw material (coffee beans…) for 5 mln Won. When it comes to bakery we will contract to buy the bakeries how much we sell. I mean kind of contract to exchanging past bought bakeries to fresh ones and we hope to sell bakeries monthly for 5 mln KRW (with our plus to every product 25%), it means we will buy product for 4 mln KRW.

I plan to hire 1 full time (professional) barista with monthly wages/slary 2,5 mln KRW. Also I will hire two part-time employees which will work in crowded/planned times and they would have got the wages in fixed cost 2,5 mln KRW monthly too.

We hope that we will sell approximately 200-300 cup of coffee a day in average for 5,000 KRW each, initially.

So, by abovementioned facts please:

1. According to your brief business plan, you should record all of your transactions in journals occurred in 2021. At least 10 transactions are required. All of your journals should at least include the following accounting entries. [All of the following questions (2-7) should follow the journals recorded in this step.]
• Accounts receivable, accounts payable, note receivable, note payable, share capital, revenue, depreciation, unearned service revenue.
2. You have to adjust your entries monthly, but you only need to adjust for one month (ex. Adjust your entries on July 31) in this report. You have to adjust your entries based on your transactions in question No. 2.
3. Please use journals to record your sales and purchases in 2021. And please try to make an income statement referring to the illustration 5-14 in your textbook (page 237)
4. Please try to use percentage of sales or receivable method to estimate your allowance for doubtful accounts, and please try to adjust your bad debt at the end of 2021.
5. Please use straight line method to confirm the depreciation process of your equipment, and please only record the depreciation process for December of 2021. Please try to disposal some of your equipment by retirement or sale.
6. Please prepare the financial position statement of your company at the end of 2021 based on your journals recorded in question No. 2.
7. Please use indirect method to prepare a cash flow statement based on your journals recorded in question No. 2.