You have decided to open a dog-walking company, which opens for business on January 1st. During the month of January, your company engages in many business transactions.

Download the excel spreadsheet Happy Harry Pets for your company below. The spreadsheet includes the following tabs:

Transactions Details the transactions that occurred in the month of January

Journal General journal for the company

Ledger General ledger for relevant accounts

Trial Balance Template for unadjusted and adjusted trial balances

IS Income Statement template

SE Statement of Stockholders Equity template

BS Balance Sheet template

CF Statement of Cash Flows template

Required:

Happy Harry Pets was incorporated on January 1st. The business maintains a retail pet store, providing gourmet dog food and

treats, and also provides a full range of pet care services, including grooming, dog-walking, and boarding.

The following transactions occurred during the first twelve months of operations:

January 1st

Common stock is issued in exchange for cash in the amount of ..

295,000

February 8th

The company purchases and pays for 160 units of gourmet dog food at a price of $25 per unit ..

4,000

March 1st

The company pays cash for a one-year insurance policy in the amount of .....

9,300

March 31st

Rent on a retail space for 12 months is paid in the amount of ...

12,480

April 1st

Grooming and boarding equipment with a useful life of 2 years is purchased for cash in the amount of

18,000

April 10th

Grooming supplies purchased on account in the amount of ..

1,450

May 15th

The company purchases and pays for another 370 units of gourmet dog food at a price of $29 per unit ..

10,730

May 30th

Grooming services are performed on account in the amount of ..

13,625

June 1st

The company pays for advertisements to be run for the next 12 months in the amount of .

864

June 30th

The company issues a 5-year bond with a face value of $100,000 and a stated annual rate of 6%.

Interest is due on June 30th each year. The market rate is 8% on the date of issuance .

100,000

July 25th

Dog-walking services are performed on account in the amount of .....

14,225

July 31st

95 units of gourmet dog food are sold for $70 per unit with terms 2/10, n/30. The sale is recorded using

the gross method in the amount of (see note c for cost flow assumptions) .

6,650

August 2nd

Boarding services are provided on account in the amount of .

6,280

August 6th

The company receives full payment from the customer for the July 31st sale

6,517

September 15th

Pet sitting services are performed on account in the amount of .....

6,245

September 29th

Customer payments are received for services previously provided in the amount of ..

1,250

October 13th

100 units of gourmet dog food are sold for $73 per unit with terms 2/10, n/30. The sale is recorded using

the gross method in the amount of .

7,300

October 29th

The company receives payment for half of the October 13th sale

3,650

November 1st

Equipment originally purchased on April 1st for $2400 is sold for $2000 cash

November 15th

A bookkeeper is hired to help the company with daily accounting taxes and annual tax preparation

December 15th

The bookkeeper is paid $3,500 for the previous month's services

3,500

Additional information:

a.

Grooming supplies on hand at the end of the month are as follows: .

870

b.

The year-end balance reported at the end of the year for the Allowance for Doubtful Accounts

is estimated as 4% of outstanding receivables at the end of the year

c.

The Company uses a perpetual inventory system and accounts for costs using the First-In-First-Out cost

flow assumption. On December 31st, a count of ending inventory reveals that there are 335 bags of dog

food on hand.

d.

All revenue is recorded in the "Sales Revenue" account and reported net of cash discounts on the income statement.

e.

The effective interest method is used to amortize bond premiums and discounts

f.

Adjustments are made at the end of the year for prepaid insurance, rent, advertising, depreciation, and interest expense.

g.

The bookkeeper is paid a salary of $3,500 on the 15th of every month.

h.

The company declared dividends of $650 for the year

i.

Assume selling expenses include advertising and supplies expense. All other expenses, other than depreciation

and interest expense, are considered general & administrative.

REQUIRED:

7.

Prepare the following financial statements on December 31st (ignore income taxes):

a. Income Statement (multi-step, see Example 5.2 in textbook)

b. Statement of Stockholders' Equity

c. Balance Sheet (classified)

Journal
Date	Accounts	Debit	Credit
1-Jan	Cash	295,000
	Common Stock		295,000
8-Feb	Inventory	4,000
	Cash		4,000
1-Mar	Prepaid Insurance	9,300
	Cash		9,300
31-Mar	Prepaid Rent	12,480
	Cash		12,480
1-Apr	Equipment	18,000
	Cash		18,000
10-Apr	Grooming Supplies	1,450
	Accounts Payable		1,450
15-May	Inventory	10,730
	Cash		10,730
30-May	Accounts Receivable	13,625
	Service Revenue		13,625
1-Jun	Prepaid Advertising	864
	Cash		864
30-Jun	Cash	92,016
	Discount on Bonds Payable	7,984
	Bonds Payable		100,000
25-Jul	Accounts Receivable	14,225
	Service Revenue		14,225
31-Jul	Accounts Recievable	6,650
	Sales Revenue		6,650
31-Jul	Cost of Good Sold (95 * $25)	2,375
	Inventory		2,375
2-Aug	Accounts Receivable	6,280
	Servive Revenue		6,280
6-Aug	Cash	6,517
	Sales Discount	133
	Accounts Receivable		6,650
15-Sep	Accounts Recievable	6,245
	Service Revenue		6,245
29-Sep	Cash	1,250
	Accounts Recievable		1,250
13-Oct	Accounts Recievable	7,300
	Sales Revenue		7,300
13-Oct	Cost of Goods Sold	2,640
	Inventory		2,640
29-Oct	Cash	3,650
	Accounts Receivable		3,650
1-Nov	Depreciation Expense (2400 /24) * 7	700
	Accumulated : Equipment		700
1-Nov	Cash	2,000
	Accumulated : Equipment	700
	Equipment		2,400
	Gain of Sale of Equipment		300
15-Nov	No entry	-
15-Dec	Salaries and Wages Expense	3,500
	Cash		3,500

d. Statement of Cash Flows (indirect method)