FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question

In November 2017, after having incorporated Cookie Creations Inc., Natalie begins operations. She has decided not to pursue the offer to supply cookies to Biscuits. Instead, she will focus on offering cooking classes. The following events occur.

Nov.    8  Natalie cashes in her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.

           8  Natalie opens a bank account for Cookie Creations Inc.

           8  Natalie purchases $500 of Cookie Creations’ common stock.

        11  Cookie Creations purchases paper and other office supplies for $95. (Use Supplies.)

        14  Cookie Creations pays $125 to purchase baking supplies, such as flour, sugar, butter, and chocolate chips. (Use Supplies.)

        15  Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer that           originally cost her $550. Natalie decides to start using it only in her new business. She estimates that the equipment is currently worth $300, and she transfers the                        equipment into the business in exchange for additional common stock.

        16  The company needs more cash to sustain its operations. Natalie’s grandmother lends the company $2,000 cash, in exchange for a two-year, 9% note payable. Interest               and the principal are repayable at maturity.

        17  Cookie Creations pays $900 for additional baking equipment.

        18  Natalie schedules her first class for November 29. She will receive $100 on the date of the class.

        25  Natalie books a second class for December 5 for $150. She receives a $60 cash down payment, in advance.

        29  Natalie teaches her first class, booked on November 18, and collects the $100 cash.

        30  Natalie’s brother develops a website for Cookie Creations Inc. that the company will use for advertising. He charges the company $600 for his work, payable at the end                of December. (Because the website is expected to have a useful life of two years before upgrades are needed, it should be treated as an asset called Website.)

       30  Cookie Creations pays $1,200 for a one-year insurance policy.

       30  Natalie teaches a group of elementary school students how to make Santa Claus cookies. At the end of the class, Natalie leaves an invoice for $300 with the school                    principal. The principal says that he will pass it along to the business office and it will be paid some time in December.

       30  Natalie receives a $50 invoice for use of her cell phone. She uses the cell phone exclusively for Cookie Creations Inc. business. The invoice is for services provided in                  November, and payment is due on December 15.

The company uses the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Website, Accounts Payable, Unearned Service Revenue, Notes Payable, Common Stock, Service Revenue, and Utilities Expense.

Instructions:

(a)  Prepare journal entries to record the November transactions.

(b)  Post the journal entries to the general ledger accounts.

(c)  Prepare a trial balance at November 30, 2017.

Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education