Question

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C2-72 (Learning Objectives 2, 4: Journalize transactions; analyze their impact on the accounting equation) Note: This mini-case is part of The Cheesecake Factory serial case contained in every chapter in this textbook. The Cheesecake Factory Incorporated (NASDAQ: CAKE) owns and operates over 200 restaurants, including The Cheesecake Factory, the Grad Lux Cafe, and the RockSugar Pan Asian Kitchen brand restaurants. It also operates two bakery production facilities. Millions of transactions occur at The Cheesecake Factory Incorporated each year. The following items are examples of hypothetical Cheesecake Factory transactions: February 1: Received $15,000 in daily restaurant sales revenue, cash (ignore cost of sales entry) February 2: Purchased sugar (inventory). $11,000, on account February 8: Paid for February advertising in local newspapers, $2.000, cash February 11: Paid employees, $75,000, cash, for the one-week pay period ending February 10 February 12: Borrowed money from bank by signing a six-month note payable, $80,000 February 15: Received and paid the electricity bill for administrative offices, $1,500 February 19: Paid $11,000 on account for the purchase of sugar on February 2 February 20: Sold Cheesecake Factory gift cards, $1,000, cash February 27: Paid February rent for restaurant building, $3,500, cash Requirements 1. What would be the journal entry for each of the listed transactions? 2. For each listed transaction, how would Cheesecake Factory's assets, liabilities, and equity be impacted?

Answer 1

Credit Ans 2 Date Assets Liabilities + Equity Ans 1 Date Feb 1 Account Title Cash Debit $15,000 Feb 1 NA + 1 Sales $15,000 Feb 2 $11,000 Feb 2 1 = I + NA $11,000 Feb 8 $2,000 Feb 8 $2,000 Feb 11 $75,000 Feb 11 NA + D $75,000 Feb 12 $80,000 Feb 12 I + NA $80,000 Inventory Accounts Payable Advertsing Expense Cash Salaries Expense Cash Cash Notes Payable Utiliites Expense Cash Accounts Payable Cash Cash Gift Card Liability Rent Expense Cash Feb 15 $1,500 Feb 15 $1,500 Feb 19 $11,000 Feb 19 = D + NA $11,000 Feb 20 $1,000 Feb 20 I + NA $1,000 Feb 27 $3,500 Feb 27 NA + D $3,500 I = Increase D= Decrease NA= Not Applicable