After a successful first semester of operations, W.L. has been presented with two new opportunities. Two of his clients were so happy with the services he's provided them that they a like to contract with the company by scheduling standing appointments. One Clent, loco business, would like him to stop by daily to mail packages and take care of other errands Another client would like him to stop by twice per week to drop off and pick up dry cleaning for office stall. However, each of these clients has asked that he bill them for his services at the end of each month. While this means that the company won't be paid for their services Un the following month, the clients will be writina checks directly to My Assistant, Inc.. so the PayPal tee will be avoided. Additionally, because these are standing appointments, he also won't need to pay his social media manager her scheduling fee. Speaking of the social media manager, because job requests may come in over the last few days of the month, W.T. has found it's sometimes difficult to pay her in full before the close of the month. Because of this, she and W.T. have careed that My Assistant, Inc. will pay her each Monday for jobs scheduled through the preceding Friday. Her $100 monthly fee will be paid on the last Monday of each month. Finally, W.1. also explained to his friends that he would need to pay them less in order to continue sending them jobs to complete. They agreed to a revised rate of $12 per job. A summary of transactions from January is below. 1. Received $1.200 in exchange for completing 80 jobs, less a $60 fee due to PayPal 2. Purchased and used gas of $280 in order to complete jobs. 3. Paid the newspaper $120 for advertising for the month. 4. Paid the social media manager $164. This amount represented her monthly fee of $100 and scheduling fee for 64 of the jobs. 5. Paid friends $240 to complete 20 jobs during the month. 6. Paid a salary of $400 to W.T. 7. Repaid W.T.'s aunt $100 of the total amount owed to her. 8. Completed 33 jobs on account for clients with standing appointments. Each client was billed at the rate of $15 per job. 9. Determined that the social media manager is still owed her scheduling fee for 16 jobs scheduled and completed over the last few days of the month. For each of the above transactions. 1. Record the transactions in the appropriate general ledger accounts under an accounting equation. Record the amounts of revenue and expense in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. 2. As of January 31, determine the total amount of assets, liabilities, and stockholder's equity. 3. How much net income did My Assistant, Inc. earn in January? How does this compare the amount of net cash flow from operations Asset Cash Accounts Receivable $903 My Assistant Accounting Equation for January Uabilities Notes - Fees Payable Payable $500 Stockholders' Equity Common Retained Stock Earnings $303 Account titles for RE $100 Hem Balance Jan 1 1. Complete Lobs 2. Purchase 3. Paid newspaper 4. Pay SMM 5. Pay friends to do jobs 6. Pay W.L. salary 7. Partial loan repayment 8. Complete jobs and be cents 9. Accrue amount due to SMM Balance January 31 Totals at onuary 31 My Assistant, Inc. Net Income for the month of January Revenues Corresponding Operating Cash Flow Expenses: Net Group Memo - Note to Aunt In January, W.T. started to repay the loan he received from his aunt. As you may recall. W.L. needed the additional funds to smooth over some cashflow issues crated by paying his friends too much in exchange for completing jobs. In your groups, draft a note from W.1. to his aunt (for the sake of this note, lets call her Aunt Jess) to explain why he needed the money. Specifically, explain to Aunt Jess: 1. Why the amount W.1. was paying to his friends was too high. 2. How much you calculated W.T. could pay his friends. 3. How much he has agreed to pay his Tiends now, and why this number is not too high even though it is greater than the amount calculated last class. erechof the items above. USE REAL NUMER FROM YOUR CLASS PACKETS to unnect pote should be relatively short (a paragraph or two should be sufficient), but be sure to fully explain each of the items above
