Question

Q Search Sheet 9+ Share Σ AutoSum , 49 Q H Fill .00 0 Insert Delete Format .00 Conditional Format Formatting as Table Cell Styles Clear Sort & Filter Find & Select Home Insert Draw Page Layout Formulas Data Review View X Cut Calibri (Body) 11 A- A+ Wrap Text General Copy Paste Β Ι Ο А = + Format Merge & Center $ B6 4 X v fx The following is a list of transactions for 2020 for Amazing Grace Event Catering: (Assume this is ABC D E F F K L M N N 12 13 a. The Does purchase a new catering van for the business by getting a loan from their bank for 14 $25,000. The Does estimate that the van will have a useful life of 60 months and at the 15 end of its useful life, the van will be worth $5,000. 16 b. John pays for insurance on the catering van in the amount of $250. L 0 Р Q R S T U V w х Y Z AA AB AC AD AE AF AG 17 18 c. John Doe purchases catering supplies on Amazon for $500 and pays in cash. 19 20 21 22 23 d. There are several events schedule for the week so Jane Doe purchases food from a local supplier for $4,500 on account. The amount is due in 30 days 24 25 e. The first catering event is a Missions trip fundraiser at a local church on a Wednesday evening. The fee for the event is $3,700 and is paid in cash at the end of the event. $ The second event is a Gala for a local non-profit organization on a Friday evening. The fee for the event is $5,500 on account and is due in 30 days. g. The third event is a wedding on a Saturday afternoon. The fee for the event is also $5,500 on account and is due in 30 days. . 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 h. The Does hired 3 waiter for each event and promised to pay $250 per event. The Does paid the waiters the next Friday for their services. They receive payment for the wedding event from transaction f. j. At the end of the month, the Does received a bill for the utilities for the month in the amount of $1,500. The bill is due in 30 days. k. Jane pays the food supplier for the food purchased in transaction c. 42 43 44 1. Amazing Grace Event Catering paid a cash distribution to John and Jane Doe in the amount of $4,000. 45 46 m. The Does make a payment in the amount of $425 on the loan from the bank used to purchase the catering van in transaction a. 47 48 49 n. Depreciation expense on the catering van is recorded for the month (round to the nearest whole number) 50 51 52 53 54 55 Assume these transactions are recorded in chronological order. Instructions Transactions Journal Entries TAccounts Income Statement Balance Sheet Stmt of Changes in Equity Statement of Cash Flows + Ready B a + 103%

Answer 1

Amazing Grace Event Catering Journal entries Date Account Ex Cash Equity Credit Calculation Debit $ 10,000 $ 10,000 a $ 25,000 Catering van Notes Payable - Bank $ 25,000 $ 250 b Insurance expense Cash $ 250 $ 500 c Supplies expense Cash $ 500 $ 4,500 Cost of goods sold Accounts Payable $ 4,500 e Cash $ 3,700 Revenue $ 3,700 f $ 5,500 Accounts Receivable Revenue $ 5,500 g $ 5,500 Accounts Receivable Revenue $ 5,500 $ 2,250 =250*3 events*3 waiters h Wages expense Cash $ 2,250 i $ 5,500 Cash Accounts Receivable $ 5,500 $ 1,500 j Utilities expense Accounts Payable $ 1,500 $ 4,500 k Accounts Payable Cash $ 4,500 1 $ 4,000 Cash Distributions Cash $ 4,000 m $ 425 Notes Payable - Bank Cash $ 425 $ 333 (25000-5000)/60 months Depreciation expense Accumulated Depreciation $ 333

Date Date Credit Date Debit Date Credit Accounts Receivable $ 5,500 i $ 5,500 $ 5,500 Debit Date Catering van $ 25,000 Debit Date Credit Accumulated Depreciation $ 333 f a Amazing Grace Event Catering T Accounts Date Debit Date Credit Cash Ex. $ 10,000 b $ 250 e $ 3,700 с $ 500 i $ 5,500 h $ 2,250 k $ 4,500 1 $ 4,000 m $ 425 a n g Bal. Bal. Bal. $ 333 $ 7,275 Accounts Payable $ 4,500 d j $ 5,500 Notes Payable - Bank $ 425 a $ 25,000 Equity Ex. Bal. Cash Distributions $ 4,000 k m $ 25,000 $ 10,000 1 $ 4,500 $ 1,500 Bal. $ 1,500 $ 24,575 Bal. $ 10,000 Bal. Revenue Bal. Cost of goods sold $ 4,500 Wages expense $ 2,250 $ 4,000 Insurance expense $ 250 e d h b f $ 3,700 $ 5,500 $ 5,500 g $ 14,700 Bal. Bal. Bal. $ 250 Bal. Supplies expense $ 500 $ 4,500 Utilities expense $ 1,500 $ 2,250 Depreciation expense $ 333 с с j n Bal. $ 500 Bal. $ 1,500 Bal. $ 333

Amazing Grace Event Catering Account Names Cash Accounts Receivable Catering van Accumulated Depreciation Accounts Payable Notes Payable - Bank Equity Cash Distributions Revenue Cost of goods sold Wages expense Insurance expense Supplies expense Utilities expense Depreciation expense Totals Adjusted TB Debit Credit 7,275 5,500 25,000 333 1,500 24,575 10,000 4,000 14,700 4,500 2,250 250 500 1,500 333 51,108 51,108

Amazing Grace Event Catering Income Statement For the Month Ended January 31, 2020 Revenue Cost of goods sold Gross Profit Operating expenses Wages expense Insurance expense Supplies expense Utilities expense Depreciation expense Total Operating expenses Net Income (Loss) 14,700 4,500 Gross Profit % 10,200 69.39% 10200/14700 2,250 250 500 1,500 333 4,833 5,367 Statement of Changes in Equity For the Month Ended January 31, 2020 Beginning Balance Equity Investment Net Income (Loss) Less: Cash Distributions Total Equity 10,000 5,367 (4,000) 11,367

Amazing Grace Event Catering Balance Sheet As of January 31, 2020 Assets Current Assets Cash Accounts Receivable Total Current Assets 7,275 5,500 12,775 Property, Plant & Equipment Catering van Accumulated Depreciation Net Property, Plant & Equipment 25,000 (333) 24,667 Total Assets 37,442 Liabilities & Stockholders Equity Current Liabilities Accounts Payable 1,500 Long-term Liabilties Notes Payable - Bank Total Liabilties 24,575 26,075 Equity 11,367 Total Liabilities & Stockholders Equity 37,442

Amazing Grace Event Catering Cashflow Statement - Indirect method For the Month Ended January 31, 2020 Cash flows from Operating Activities Net Income (Loss) 5,367 Adjustments to reconcile net income to net cash from operating activities Depreciation expense Changes in operating assets and liabilities Accounts Receivable (5,500) Accounts Payable 1,500 Net Cash Provided/(Used) by Operating Activities 1,700 333 Cash flows from Investing Activities Purchase of Catering van Net Cash Provided/(Used) by Investing Activities Cash flows from Financing Activities Net Borrowings from Notes Payable - Bank Proceeds from Equity Investment Payment of Cash Dividends Net Cash Provided/(Used) by Financing Activities Net Change in Cash Beginning Cash Ending Cash (425) 10,000 (4,000) 5,575 7,275 7,275

Note: Since purchase of van is by getting a bank loan, its noncash investing and financing activity. So, not included in Cahflow Statement above