Question

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COOKIE CREATIONS PART 4
Nathalie had a very busy December. At the end of the month, after journalizing and posting the December transactions, Nathalie had the following unadjusted trial balance. Nathalie decided to make financial statement every month. COOKIE CREATIONS UNADJUSTED TRIAL BALANCE DECEMBER 31, 2019 Cash A/R Supplies Prepaid Insurance Equipment Accum. Depre-equipment Unearned service revenue Notes payable Interest payable Share capital-ordinary Retained earnings Dividend Service revenue Advertising expense Salaries expense Debit Credit $3.345 1.300 540 1.320 1.200 $20 750 2.000 5 800 255 150 4.575 50 500 $8.405 $8.405 As of December 31, the following adjusting entry data are provided. 1. A count reveals that $390 of baking supplies were used. 2. Depreciation is recorded on the baking equipment purchased in November. The baking equipment has a useful life of 5 years. 3. Interest on the note payable is accrued. 4. A cell phone invoice is received for $75. The invoice is for services provided during the month of December and is due on January 15 5. Natalie is unexpectedly telephoned on December 28 to give a cookie class at the neighborhood community center on December 31. In early January Cookie Creations sends an invoice for $450 to the community center. 6. Because the cookie-making class occurred unexpectedly on December 31 and is for such a large group of children, Natalie's assistant helps out. Her assistant worked 7 hours at a rate of $8 per hour. 7. On Dec 9, Cookie Creations received $750 in advance from the local school board for five classes that the company will give during December and January. An analysis of the unearned revenue account reveals that two of the five classes paid for by the local school board on December 9 still have not been taught by the end of December 8. One month's worth of insurance has expired. Nathalie discovered the following errors made in December 2019: 9. A collection of $300 from a client on account on Dec 8 was debited to Cash $300 and credited to Service Revenue $300. 10. On Dec 23, Cookie Creations issued check for $800 to Natalie's assistant. The check was incorrectly journalized and posted for $500. Instructions a. Prepare the adjusting journal entries and correcting entries on December 31, 2019 b. Enter the adjustment and correction on the worksheet, and complete the worksheet. C. Prepare an income statement and retained earnings statement for the month ended December 31, 2019, and a statement financial position as of December 31, 2019. d. Prepare closing entries as of December 31, 2019 e. Prepare a post-closing trial balance.
Note: Khusus soal b (worksheet) boleh dikerjakan menggunakan excel, tapi yang lainnya harus dikerjakan secara manual (tulis tangan).

Answer 1

Debit Credit 390 390 20 20 73 a) Adjusting and Correcting Entries 74 75 Date Account Titles & Explanation 76 Dec-31 Supplies expense 77 Supplies 78 (To record supplies consumed during the Year) 79 80 Dec-31 Depreciation Expense 81 Accumulated Depreciation - Equipment 82 (To record depreciation expense) 83 84 Dec-31 Interest Expense 85 Interest Payable 86 (To record accrued interest expense) 87 88 Dec-31 Telephone expense 89 Telephone expense Payable 90 (To record accrued expense) 91 92 Dec-31 Accounts Receivable 93 Service Revenue 94 (To record accrued revenue) Ол (No rate of interest is given) 5 75 75 450 450

96 56 97 Dec-31 Salaries expense (78) Salaries Payable (To record accrued salaries) 56 98 99 100 375 101 Dec-31 Unearned service Revenue Service Revenue (To record cash received in advance) 375 102 103 104 110 105 Dec-31 Insurance expense Prepaid insurance (To record expired insurance) 110 106 107 108 Correcting entries 109 110 300 111 Dec-31 Service Revenue Accounts Receivable (To record correction of account) 300 112 113 114 300 Dec-31 Salaries expense (800-500) Cash 115 300 116

117 118 Cookie Creations Inc. Income Statement For the month ended December 31 119 120 121 5,100 122 123 75 124 856 125 50 Revenues Service Revenue Less expenses Telephone expenses Salaries expense Advertising expense Depreciation Expense Interest Expense Supplies expense Insurance expense Total expenses Net Income 126 Equipment 20 127 5 128 390 129 110 130 1,506 3,594 131 132

133 134 135 136 137 138 139 Cookie Creations Inc. Retained Earnings Statement For the month ended December 31 Beginning Balance of Retained Earnings 255 Add Net Income 3,594 Less Dividend (150) 3,444 Ending Balance of Retained Earnings 3,699 140 141 142 143 144 145 146 Cookie Creations Inc. Balance Sheet As on December 31 Assets Cash 3,045 Accounts Receivable 1,450 Supplies 150 Prepaid Insurance 1,210 Total Current Assets Equipment 1,200 Less Accumulated Depreciation - Equipment (40) Total Assets 5,855 147 148 149 150 151 152 1,160 7,015 153

154 155 375 75 156 10 157 158 56 159 516 160 Liabilities Unearned service Revenue Telephone expenses Payable Interest Payable Salaries Payable Total Current Liabilities Notes Payable Total Liabilities Shareholder's Equity Share Capital -ordinary Retained Earnngs Total Shareholder's Equity Total Liabilities & Shareholder's Equity 2000 161 2516 162 163 800 3,699 164 165 4,499 7,015 166 167 168 169