Question
The following account balances are shown on November 30, 1999, for the Clever Bookstore: The following transactions occurred during December. 1. Paid workers the $2,000
The following account balances are shown on November 30, 1999, for the Clever Bookstore:
The following transactions occurred during December.
1. Paid workers the $2,000 owed them on November 30.
2. Made sales totaling $40,000. Half of the sales were for cash. The other half were on account. The cost of goods sold was $25,000.
3. Purchased inventory on account, $15,000.
4. Collected in cash $22,000 of receivables.
5. Used supplies totaling $800.
6. Paid accounts payable of $ 12,000.
7. Paid all December’s interest on the note payable in the amount of $300.
Required
a. Analyze all transactions using the basic accounting equation. Begin your analysis by entering the November 30 account balances into a worksheet. Then enter each of the transactions above into your worksheet.
b. Prepare a balance sheet as of December 31, 1999.
c. Prepare an income statement for the month ended December 31, 1999.
Cash Accounts receivable Inventory Supplies Total $ 8,000 9,000 60,000 3,000 $80,000 Accounts payable Salaries payable Notes payable J. Clever, capital Total $4,000 2,000 35,000 39,000 $80,000
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