Question

Natalie had a very busy December. At the end of the month, after journalizing and posting the December transactions and adjusting entries, Natalie prepared the following adjusted trial balance. COOKIE CREATIONS Adjusted Trial Balance December 31, 2019  

		Debit		Credit
ash		$1,180
Accounts Receivable		875
Supplies		350
Prepaid Insurance		1,210
Equipment		1,200
Accumulated Depreciation—Equipment				$40
Accounts Payable				75
Salaries and Wages Payable				56
Unearned Service Revenue				300
Notes Payable				2,000
Interest Payable				15
Common Stock				800
Dividends		500
Service Revenue				4,515
Salaries and Wages Expense		1,006
Utilities Expense		125
Advertising Expense		165
Supplies Expense		1,025
Depreciation Expense		40
Insurance Expense		110
Interest Expense		15
		$7,801		$7,801

1)Prepare and Income statement

2) Prepare an retained earnings statement for the 2 months ended December 31, 2019

3) Prepare a classified balance sheet at December 31, 2019. The note payable has a stated interest rate of 6%, and the principal and interest are due on November 16, 2018.

4) Natalie has decided that her year-end will be December 31, 2019. Prepare closing entries as of December 31, 2019. and

5) Prepare a post-closing trial balance.

Answer 1

COOKIE CREATIONS Income Statement
For the Two Months Ended December 31st
Revenues
Service revenue		$4,515
Expenses
Supplies expense	$1,025
Salaries expense	1006
Utilities expense	125
Insurance expense	110
Advertising  expense	165
Depreciation expense	40
Interest expense	15
Total expenses		2,486
Net income		$2,029

2)
COOKIE CREATIONS
Retained Earnings Statement
For the Two Months Ended December 31, 2019
Retained earnings, beginning	$            -
Add: Net income	$  2,029.00
Less: Dividends	$   (500.00)
Retained earnings, December 31	$  1,529.00
3)
COOKIE CREATIONS
Statement of Financial Position
December 31 2019
Property, plant, and equipment
Equipment	$  1,200.00
Less: Accumulated depreciation—equipment	$       40.00	$  1,160.00
Current assets
Prepaid expenses	$  1,210.00
Supplies	$     350.00
Accounts receivable	$     875.00
Cash	$  1,180.00
Total current assets		$  3,615.00
Total Assets		$  4,775.00
Equity and Liabilities
Equity
Share Capital—Ordinary	$     800.00
Retained Earnings	$  1,529.00	$  2,329.00
Non-current liabilities
Interest payable  (2000 x 6%/12) x 1.5 months	$       15.00
Notes payable	$  2,000.00
Total non-current liabilities		$  2,015.00
Current liabilities
Note payable—current portion
Accounts payable	$       75.00
Salaries and wages payable	$       56.00
Unearned service revenue	$     300.00
Total current liabilities..		$     431.00
Total liabilities		$  2,446.00
Total equity and liabilities		$  4,775.00
4)
GENERAL JOURNAL
Account titles	Debit	Credit
Service Revenue	$  4,515.00
Income Summary
Income Summary	$  2,486.00
Supplies expense		$  1,025.00
Salaries expense		$  1,006.00
Utilities expense		$     125.00
Insurance expense		$     110.00
Advertising  expense		$     165.00
Depreciation expense		$       40.00
Interest expense		$       15.00
Income Summary	$  1,529.00
Retained Earnings		$  1,529.00
Retained Earnings	500
Dividends		500
6)
Cookie Creations
Adjusted Trial Balance
31-Dec-19
	Debit	Credit
Cash	$  1,180.00
Accounts Receivable	$     875.00
Supplies	$     350.00
Prepaid Insurance	$  1,210.00
Equipment	$  1,200.00
Accumulated Depreciation—Equipment		$       40.00
Accounts Payable		$       75.00
Salaries and Wages Payable		$       56.00
Notes Payable		$  2,000.00
Unearned Service Revenue		$     300.00
Interest Payable		$       15.00
Share Capital—Ordinary		$     800.00
Retained Earnings		$  1,529.00
Total	$  4,815.00	$  4,815.00

Answer 2

Income statement
For the 2 months ended December 31, 2016
Revenues:
Service Revenue		4515
Expenses:
Salaries and Wages Expense	1006
Utilities Expense	125
Advertising Expense	165
Supplies Expense	1025
Depreciation Expense	40
Insurance Expense	110
Interest Expense	15
Total expenses		2486
Net income		2029