This case integrates knowledge and skills of the first three course learning outcomes. These CLOs are: Describe the process of recording and communicating fitucial information Identify the effects of business transactions en reported financial information Prepare financial statements according so GAAP Unhappy with her job as a telecommunications consultant, Cathy Luce started a new business called Magical Meals. For $300 Ms. Luce plans customized menus based on her clients needs. She creates vegetarian meals, special diets for those with health problems, or menus for families with little time for cooking. She sets aside a day for each client in which she packs up her red Alpha Romeo with pots and utensils, shops for food, and cooks 20 entrees in her client's home. Then she labels and either refrigerates or freezes the entrees and takes the dirty pans home with her. Cathy requires that payment he made on the day services are rendered Before changing careers, Ms. Luce hired a career consultant Together they decided that a career in cooking looked viable. First she considered being a restaurant chef. Then, through the Internet, she found the U.S. Personal Chef Association. "I called them that day. I knew without a doubt that that was what I am supposed to do." Ms. Luce says. Ms. Luce took a course from the U.S. Small Business Administration on how to start a business, paid $2,000 in up-front costs, and determined the name for her business. By cooking in her clients' homes, she avoided purchasing expensive equipment, such as extra sinks, to meet state requirements for commercial kitchens. Instructions: Prepare the appropriate end-of-month reports for Magical Meals for the month ending November 30 this year using the following account names and balances. (Please note: The following account names and balances were created for this case study. Only the name of the business is real.) Cash in Bank $3,750.00 Computer Equipment 4,897,00 Cooking Equipment 1,281.00 Acets. Pay. The Computer Store 1,050.00 Accts. Pay. - The Green Grocers 124.00 Cathy Luce Capital 6,748.00 Cathy Luce. Withdrawals 3,000.00 Fees 6,500.00 Advertising Expense 75.00 Food Expense 1.244.00 Utilities Expense 175.00 Using blank accounting stationery, complete the following for Magical Meals. Magic Meals Work Sheet For the Month Ended November 30th, 21XX Trial Balance Adjustments Income Statement Balance Sheet Accounts Dr Dr. CE Dr. Dr Cr using the following account names and balances. (Please note: The following account names and balances were created for this case study. Only the name of the business is real.) Cash in Bank $3,750.00 Computer Equipment 4,897,00 Cooking Equipment 1.281.00 Accts, Pay. - The Computer Store 1,050.00 Accts. Pay. - The Green Grocers 124.00 Cathy Luce Capital 6,748.00 Cathy Luce. Withdrawals 3,000.00 Fees 6,500.00 Advertising Expense 75.00 Food Expense 1,244.00 Utilities Expense 175.00 Using blank accounting stationery, complete the following for Magical Meals. Magic Meals Work Sheet For the Month Ended November 30th, 21XX Trial Balance Adjustments Income Statement Balance Sheet Accounts Dr. _Dr C Dr. Cr. Dr. Cr. 2. An income statement 3. A statement of changes in owner's equity. Beginning capital for November I was $6,748.00. There were no additional investments made in November. 4. A balance sheet Instructions: Answer the following questions. 1. What are financial statements? Where does the preparation of financial statements fall in the accounting cycle? 2. When does a net loss occur? 3. What information does a balance sheet report about a business? 4. Discuss why Magical Meals has no accounts receivable. 1 This case integrates knowledge and skills of the first three course learning outcomes. These CLOs are: Describe the process of recording and communicating fitucial information Identify the effects of business transactions en reported financial information Prepare financial statements according so GAAP Unhappy with her job as a telecommunications consultant, Cathy Luce started a new business called Magical Meals. For $300 Ms. Luce plans customized menus based on her clients needs. She creates vegetarian meals, special diets for those with health problems, or menus for families with little time for cooking. She sets aside a day for each client in which she packs up her red Alpha Romeo with pots and utensils, shops for food, and cooks 20 entrees in her client's home. Then she labels and either refrigerates or freezes the entrees and takes the dirty pans home with her. Cathy requires that payment he made on the day services are rendered Before changing careers, Ms. Luce hired a career consultant Together they decided that a career in cooking looked viable. First she considered being a restaurant chef. Then, through the Internet, she found the U.S. Personal Chef Association. "I called them that day. I knew without a doubt that that was what I am supposed to do." Ms. Luce says. Ms. Luce took a course from the U.S. Small Business Administration on how to start a business, paid $2,000 in up-front costs, and determined the name for her business. By cooking in her clients' homes, she avoided purchasing expensive equipment, such as extra sinks, to meet state requirements for commercial kitchens. Instructions: Prepare the appropriate end-of-month reports for Magical Meals for the month ending November 30 this year using the following account names and balances. (Please note: The following account names and balances were created for this case study. Only the name of the business is real.) Cash in Bank $3,750.00 Computer Equipment 4,897,00 Cooking Equipment 1,281.00 Acets. Pay. The Computer Store 1,050.00 Accts. Pay. - The Green Grocers 124.00 Cathy Luce Capital 6,748.00 Cathy Luce. Withdrawals 3,000.00 Fees 6,500.00 Advertising Expense 75.00 Food Expense 1.244.00 Utilities Expense 175.00 Using blank accounting stationery, complete the following for Magical Meals. Magic Meals Work Sheet For the Month Ended November 30th, 21XX Trial Balance Adjustments Income Statement Balance Sheet Accounts Dr Dr. CE Dr. Dr Cr using the following account names and balances. (Please note: The following account names and balances were created for this case study. Only the name of the business is real.) Cash in Bank $3,750.00 Computer Equipment 4,897,00 Cooking Equipment 1.281.00 Accts, Pay. - The Computer Store 1,050.00 Accts. Pay. - The Green Grocers 124.00 Cathy Luce Capital 6,748.00 Cathy Luce. Withdrawals 3,000.00 Fees 6,500.00 Advertising Expense 75.00 Food Expense 1,244.00 Utilities Expense 175.00 Using blank accounting stationery, complete the following for Magical Meals. Magic Meals Work Sheet For the Month Ended November 30th, 21XX Trial Balance Adjustments Income Statement Balance Sheet Accounts Dr. _Dr C Dr. Cr. Dr. Cr. 2. An income statement 3. A statement of changes in owner's equity. Beginning capital for November I was $6,748.00. There were no additional investments made in November. 4. A balance sheet Instructions: Answer the following questions. 1. What are financial statements? Where does the preparation of financial statements fall in the accounting cycle? 2. When does a net loss occur? 3. What information does a balance sheet report about a business? 4. Discuss why Magical Meals has no accounts receivable. 1
