Question

P3-4 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio as a Manager LO3-4, 3-5, 3-6 The following information applies to the questions displayed below.) art 1 of 3 bints Kaylee James, a connoisseur of fine chocolate, opened Kaylee's Sweets in Collegetown on February 1. The shop specializes in a selection of gourmet chocolate candies and a line of gourmet ice cream. You have been hired as manager. Your duties include maintaining the store's financial records. The following transactions occurred in February the first month of operations eBook References a. Received four shareholders' contributions totaling $28.900 cash to form the corporation; issued 500 shares of $0.10 par value common stock b. Paid three months' rent for the store at $1,740 per month recorded as prepaid expenses). c. Purchased and received candy for $5,800 on account, due in 60 days. d. Purchased supplies for $1,330 cash. e Negotiated and signed a two-year $16.000 loan at the bank, receiving cash at the time. f Used the money from (e) to purchase a computer for $2,750 (for recordkeeping and Inventory trackingl used the balance for furniture and fixtures for the store. g. Placed a grand opening advertisement in the local paper for $500 cash; the ad ran in the current month. h. Made sales on Valentine's Day totaling $3,100: $2,685 was in cash and the rest on accounts receivable. The cost of the candy sold was $1,300. i. Made a $580 payment on accounts payable J. Incurred and paid employee wages of $1.400. k Collected accounts receivable of $110 from customers. I Made a repair to one of the display cases for $120 cash m. Made cash sales of $2,900 during the rest of the month. The cost of the candy sold was $1.710

Answer 1

Cash					Accounts Receivable
Beg. bal.	0				Beg. bal.	0
(a)	28900	1740	(b)		(h)	415	110	(k)
e)	16000	1330	(d)
(h)	2685	16000	(f)		End. bal.	305
(k)	110	500	(g)
(m)	2900	580	(i)
		1400	(j)
		120	(l)
End. bal.	28925
Supplies					Inventory
Beg. bal.	0				Beg. bal.	0
(d)	1330				c	5800	1300	(h)
							1710	(m)
End. bal.	1330				End. bal.	2790
Prepaid Expenses					Equipment
Beg. bal.	0				Beg. bal.	0
(b)	1740				(f)	2750
End. bal.	1740				End. bal.	2750
Furniture and Fixtures					Accounts Payable
Beg. bal.	0				Beg. bal.		0
(f)	13250				(i)	580	5800	c
End. bal.	13250				End. bal.		5220
Notes Payable					Common Stock
Beg. bal.		0			Beg. bal.		0
		16000	e				50	(a)
End. bal.		16000			End. bal.		50
Additional Paid-in Capital					Sales Revenue
Beg. bal.		0			Beg. bal.		0
		28850	a				3100	(h)
							2900	(m)
End. bal.		28850			End. bal.		6000
Cost of Goods Sold					Repair Expense
Beg. bal.	0				Beg. bal.	0
(h)	1300				(l)	120
(m)	1710
					End. bal.	120
End. bal.	3010
Advertising Expense					Wage Expense
Beg. bal.	0				Beg. bal.	0
(g)	500				(j)	1400
End. bal.	500				End. bal.	1400