Cookie Creations

Part 4

(a)

GENERAL JOURNAL / J2
Date / Account Titles and Explanation / Debit / Credit
Dec. / 1 / No Journal Entry
4 / Cash / 100
Teaching Revenue / 100
8 / Cash / 250
Accounts Receivable / 250
10 / Cash / 625
Unearned Revenue / 625
15 / Accounts Payable / 50
Cash / 50
16 / Accounts Payable / 600
Cash / 600
18 / Cash / 50
Unearned Revenue / 50
24 / Cash / 3,000
Accounts Receivable / 500
Teaching Revenue / 3,500
24 / Baking Supplies / 1,250
Cash / 1,250
24 / Salaries Expense / 800
Cash / 800
24 / Dividends Declared / 500
Cash / 500

(a), (c) and (f)

Cash
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 305
Dec. 4 / J2 / 100 / 405
Dec. 8 / J2 / 250 / 655
Dec. 10 / J2 / 625 / 1,280
Dec. 15 / J2 / 50 / 1,230
Dec. 16 / J2 / 600 / 630
Dec. 18 / J2 / 50 / 680
Dec. 24 / J2 / 3,000 / 3,680
Dec. 24 / J2 / 1,250 / 2,430
Dec. 24 / J2 / 800 / 1,630
Dec. 24 / J2 / 500 / 1,130
Accounts Receivable
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 250
Dec. 8 / J2 / 250 / 0
Dec. 24 / J2 / 500 / 500
Dec. 31 / J3 / 375 / 875
Advertising Supplies
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 75
Dec. 31 / Adjusting / J3 / 25 / 50
Baking Supplies
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 100
Dec. 24 / J2 / 1,250 / 1,350
Dec. 31 / Adjusting / J3 / 1,000 / 350


(a), (c) and (f) (Continued)

Prepaid Insurance
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 1,200
Dec. 31 / Adjusting / J3 / 100 / 1,100
Baking Equipment
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 1,200
Accumulated Depreciation, Baking Equipment
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 20
Dec. 31 / Adjusting / J3 / 20 / 40
Website
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 600 / 600
Accumulated Amortization, Website
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 31 / Adjusting / J3 / 25 / 25
Accounts Payable
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 650
Dec. 15 / J2 / 50 / 600
Dec. 16 / J2 / 600 / 0
Dec. 31 / Adjusting / J3 / 75 / 75
Salaries Payable
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 31 / Adjusting / J3 / 56 / 56


(a), (c) and (f) (Continued)

Interest Payable
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 5
Dec. 31 / Adjusting / J3 / 10 / 15
Unearned Revenue
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 25
Dec. 10 / J2 / 625 / 650
Dec. 18 / J2 / 50 / 700
Dec. 31 / Adjusting / J3 / 400 / 300
Note Payable
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 2,000
Retained Earnings
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 31 / Closing / J4 / 2,494 / 2,494
Dec. 31 / Closing / J4 / 500 / 1,994
Dividends
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 24 / J2 / 500 / 500
Dec. 31 / Closing / J4 / 500 / 0
Income Summary
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 31 / Closing / J4 / 4,725 / 4,725
Dec. 31 / Closing / J4 / 2,231 / 2,494
Dec. 31 / Closing / J4 / 2,494 / 0
Common Stock
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 800

(a), (c) and (f) (Continued)

Teaching Revenue
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 350
Dec. 4 / J2 / 100 / 450
Dec. 24 / J2 / 3,500 / 3,950
Dec. 31 / Adjusting / J3 / 375 / 4,325
Dec. 31 / Adjusting / J3 / 400 / 4,725
Dec. 31 / Closing / J4 / 4,725 / 0
Salaries Expense
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 24 / J2 / 800 / 800
Dec. 31 / Adjusting / J3 / 56 / 856
Dec. 31 / Closing / J4 / 856 / 0
Telephone Expense
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 50
Dec. 31 / Adjusting / J3 / 75 / 125
Dec. 31 / Closing / J4 / 125 / 0
Advertising Supplies Expense
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 20
Dec. 31 / Adjusting / J3 / 25 / 45
Dec. 31 / Closing / J4 / 45 / 0
Baking Supplies Expense
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 25
Dec. 31 / Adjusting / J3 / 1,000 / 1,025
Dec. 31 / Closing / J4 / 1,025 / 0


(a), (c) and (f) (Continued)

Depreciation Expense, Baking Equipment
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 20
Dec. 31 / Adjusting / J3 / 20 / 40
Dec. 31 / Closing / J4 / 40 / 0
Amortization Expense, Website
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 31 / Adjusting / J3 / 25 / 25
Dec. 31 / Closing / J4 / 25 / 0
Interest Expense
Date / Explanation / Ref / Debit / Credit / Balance
Nov. 30 / Balance / P / 5
Dec. 31 / Adjusting / J3 / 10 / 15
Dec. 31 / Closing / J4 / 15 / 0
Insurance Expense
Date / Explanation / Ref / Debit / Credit / Balance
Dec. 31 / Adjusting / J3 / 100 / 100
Dec. 31 / Closing / J4 / 100 / 0


(b)

COOKIE CREATIONS

Unadjusted Trial Balance

December 31, 2007
Account / Debit / Credit
Cash / $1,130
Accounts receivable / 500
Advertising supplies / 75
Baking supplies / 1,350
Prepaid insurance / 1,200
Baking equipment / 1,200
Accumulated depreciation—baking equipment / $ 20
Website / 600
Accounts payable / 0
Interest payable / 5
Unearned revenue / 700
Note payable / 2,000
Common stock / 800
Dividends / 500
Teaching revenue / 3,950
Salaries expense / 800
Telephone expense / 50
Advertising supplies expense / 20
Baking supplies expense / 25
Depreciation expense—baking equipment / 20
Interest expense / 5
$7,475 / $7,475


(c)

GENERAL JOURNAL
Date / Account Titles and Explanation / Debit / Credit
Dec. / 31 / Advertising Supplies Expense ($75 – $50) / 25
Advertising Supplies / 25
31 / Depreciation Expense, Baking Equipment / 20
Accumulated Depreciation—
Baking Equipment ($1,200 ÷ 60) / 20
31 / Amortization Expense—Website ($600 ÷ 24) / 25
Accumulated Amortization—Website / 25
31 / Interest Expense / 10
Interest Payable / 10
31 / Insurance Expense / 100
Prepaid Insurance / 100
31 / Accounts Receivable / 375
Teaching Revenue / 375
31 / Baking Supplies Expense / 1,000
Baking Supplies / 1,000
31 / Telephone Expense / 75
Accounts Payable / 75
31 / Salaries Expense (7 hours X $8) / 56
Salaries Payable / 56
31 / Unearned Revenue ($700 – $300) / 400
Teaching Revenue / 400


(d)

COOKIE CREATIONS
Adjusted Trial Balance

December 31, 2007

Account

/ Debit / Credit
Cash / $1,130
Accounts receivable / 875
Advertising supplies / 50
Baking supplies / 350
Prepaid insurance / 1,100
Baking equipment / 1,200
Accumulated depreciation—baking equipment / $ 40
Website / 600
Accumulated amortization—website / 25
Accounts payable / 75
Salaries payable / 56
Interest payable / 15
Unearned revenue / 300
Note payable / 2,000
Common stock / 800
Dividends / 500
Teaching revenue / 4,725
Salaries expense / 856
Telephone expense / 125
Advertising supplies expense / 45
Baking supplies expense / 1,025
Depreciation expense—baking equipment / 40
Amortization expense—website / 25
Insurance expense / 100
Interest expense / 15 / ______
$8,036 / $8,036


(e)

COOKIE CREATIONS
Income Statement
For the Two Months Ended December 31, 2007
Revenues
Teaching revenue / $4,725
Expenses
Baking supplies expense / $1,025
Salaries expense / 856
Telephone expense / 125
Insurance expense / 100
Advertising supplies expense / 45
Depreciation expense / 40
Amortization expense / 25
Interest expense / 15
Total expenses / 2,231
Net income / $2,494
COOKIE CREATIONS
Retained Earnings Statement
For the Two Months Ended December 31, 2007
Retained Earnings, November 1 / $ 0
Add: Net income / 2,494
2,494
Less: Dividends / 500
Retained Earnings, December 31 / $1,994


(e) (Continued)

COOKIE CREATIONS
Balance Sheet
December 31, 2007
Assets
Currents assets
Cash / $1,130
Accounts receivable / 875
Advertising supplies / 50
Baking supplies / 350
Prepaid insurance / 1,100
Total current assets / 3,505
Property, plant, and equipment
Baking equipment / $1,200
Less: Accumulated depreciation—baking
equipment / 40 / $1,160
Intangible asset
Website / $ 600
Less: Accumulated amortization—website / 25 / 575 / 1,735
Total assets / $5,240
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable / $ 2000
Accounts payable ……………………………………………. / 75
Salaries payable / 56
Unearned revenue ……………. / 300
Interest payable / 15
Total liabilities all Current / 2,446
Stockholders’ equity
Common stock / 800
Retained earnings / 1,994 / 2,794
Total liabilities and stockholders’ equity / $5,240


(f)

GENERAL JOURNAL

/ J4
Date / Account Titles and Explanation / Debit / Credit
Dec. / 31 / Teaching Revenue / 4,725
Income Summary / 4,725
31 / Income Summary / 2,231
Salaries Expense / 856
Telephone Expense / 125
Advertising Supplies Expense / 45
Baking Supplies Expense / 1,025
Depreciation Expense—Baking
Equipment /
40
Amortization Expense—Website / 25
Insurance Expense / 100
Interest Expense / 15
31 / Income Summary / 2,494
Retained Earnings / 2,494
31 / Retained Earnings / 500
Dividends / 500


(g)

COOKIE CREATIONS
Post-Closing Trial Balance
December 31, 2007
Account / Debit / Credit
Cash / $1,130
Accounts receivable / 875
Advertising supplies / 50
Baking supplies / 350
Prepaid insurance / 1,100
Baking equipment / 1,200
Accumulated depreciation—baking equipment / $ 40
Website / 600
Accumulated amortization—website / 25
Accounts payable / 75
Salaries payable / 56
Interest payable / 15
Unearned revenue / 300
Note payable / 2,000
Common stock / 800
Retained earnings / 1,994
$5,305 / $5,305