FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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You will find the transactions within the spreadsheet. This additional information may be of use, as well.
Additional Info (this mainly relates to adjustments - ie. Thinking)
- Because of the loan, you have to provide the bank with your financial statements at the end of the month - Feb 28, 2021. (we have to make proper FS including adjustments)
- You do a quick count of your inventory and find there are 19 pairs of shoes in inventory.
- On March 2nd, you receive a report from Shopify that states your credit card processing fees for the last month totalled $250. Shopify will remove the amount due from your future sales transactions.
- The March 2nd report also includes notice that your next $400 monthly fee will also simply reduce the amount received from future sales transactions.
- You think that your office furniture etc. will last for about 3 years.
- You do a quick check and find there's still about $370 worth of office and packing supplies left.
- In your wallet you find receipts dating Feb 13 - Feb 28 from Canada Post. They are all for shipping the shoes to customers throughout the month. You must not have had business cheques because the total of the receipts, $1089, was all charged to your personal MasterCard.
Transcribed Image Text:Questions to be answered (this is the Knowledge / Understanding part)
1. What was Just for Kicks net income for the month? What was its gross profit and gross profit
%?
2. What is the company's ending Cash balance? What is the company's ending Equity? Why is
cash not equal to equity?
3. Under the perpetual system of inventory, the Inventory account is debited at each purchase
and credited at each sale. Why is it recommended that a business still do an inventory count
once in a while?
4. Transaction 6 is a monthly fee paid to Shopify. If instead of monthly payments, Just for Kicks
had to pay $4,800 in February for a year's service, what would have been the impact on the
February financial statements?
5. What is the purpose of the adjusting journal entries? In this case, the AJES negatively
affected the net income, so why did Just for Kicks even do them?
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