Question

Topic: Classification and Analysis of Transactions and preparation of worksheet. Cup Cakes Heaven (SoleTrader) Ms E Chan(Proprietor) In the month of March 20XX (beginning) Ms E Chan started a small business selling fine classy and natural cupcakes, coffee/tea and soft drinks. The first transactions for the first month of business are as follows:- Tran. 1: Open a business bank account and deposited $10,000 of her own personal money. SCREENS 3-4 OF 6 O Type here to search

regular, normal format.

Answer 1

There is only one adjustment entry at year end that is prepaid rent and rent expenses.

10 coulmn worksheet

accounts	unadjusted trial balance	adjustments	adjusted trial balance	income statement	balance sheet
accounts	Dr. ($)	Cr. ($)	Dr. ($)	Cr. ($)	Dr. ($)	Cr. ($)	Dr. ($)	Cr. ($)	Dr. ($)	Cr. ($)
cash	9400				9400				9400
accounts receivable	1000				1000				1000
inventory	1000				1000				1000
prepaid rent	6000			2000	4000				4000
equipment	6000				6000				6000
furniture and fixture	2000				2000				2000
short-term loans (inventory)		2000				2000				2000
bank loan		10000				10000				10000
capital		10000				10000				10000
drawings	200				200				200
sales		10000				10000		10000
cost of sales	3000				3000		3000
salaries expenses	2800				2800		2800
advertising expenses	600				600		600
rent expenses			2000		2000		2000
totals	32000	32000	2000	2000	32000	32000	8400	10000	23600	22000
net income							1600			1600
totals							10000	10000	23600	23600

income statement

Cup Cakes Heaven
Income Statement
For the period March
sales	10000
cost of goods sold	3000
gross profit	7000
expenses
salaries expenses	2800
rent expenses	2000
advertising expenses	600
total expenses	5400
net income	1600

balance sheet

Cup Cakes Heaven
Balance Sheet
For the period March
assets
current assets
cash	9400
accounts receivable	1000
inventory	1000
prepaid rent	4000
total current assets		15400
non-current assets
equipment	6000
furniture and fixture	2000
total non-current assets		8000
total assets		23400
liabilities and stockholders equity
current liabilities
short-term loans (inventory)	2000
total current liabilities		2000
non-current liabilities
bank loan	10000
total non-current liabilities		10000
stockholders equity
capital	10000
net income	1600
drawings	-200
total stockholders equity		11400
total liabilities and stockholders equity		23400

journal entries

	Journal Entries	Dr. ($)	Cr. ($)
1	cash	10000
	To capital		10000
2	cash	10000
	To bank loan		10000
3	prepaid rent	6000
	To cash		6000
4	inventory	4000
	To short-term loan		4000
5	equipment	6000
	To cash		6000
6	furniture and fixture	2000
	To cash		2000
7a	accounts receivable	3000
	cash	7000
	To sales		10000
7b	cost of goods sold	3000
	To inventory		3000
8	short-term loan	2000
	To cash		2000
9	salaries expenses	2800
	To cash		2800
10	advertising expenses	600
	To cash		600
11	cash	2000
	To accounts receivable		2000
12	drawings	200
	To cash		200
13	rent expenses	2000
	To prepaid rent		2000