Question

Date Transaction Week 1 April 1 Zita contributes $7,000 to commence the business 1 Zita borrows $15,000 from Fremont Bank for three years with interest charged at 9% (annually) Zita hires two staff to be paid every 2 weeks (on a Thursday) 3 Zita signs a rent contract on a shop and pays $2,300 for two months' rent (April and May). She purchases four ice-cream freezers for $600 each. The estimated life is 8 years using straight line depreciation and Zita believes that she could sell the freezers at the end of this time for $120 each. Zita rents a portable ice-cream trailer for catering. She pays $200 for the month of April. 4 Zita purchases an ipad which will be used as a cash register for $576. The estimated life is 4 years using straight-line depreciation. Zita also purchases supplies (ice-cream boxes, napkins etc.) for $140 cash. 2 6 Zita purchases bulk ice-cream on credit from Sandhu Stores for $1,024. Zita pays $960 for insurance for the year April 1, 2021-March 31, 2022. 1 Hint: While this business is a sole proprietorship, you are required to account for this cash contribution as you would for a corporation 2 Hint: Supplies are those types of supplies that are used up in the course of doing business. They are not part of cost of goods. Week 2 10 On Saturday 10th April, Zita supplied ice-cream for Lucy Hernandez' wedding. That evening, she sent Mr. Hernandez an invoice for $810. Terms 3/10, n/30 (The cost of materials was $340) 11 Mr. Hernandez rang to complain that four buckets of ice-cream had melted. Zita agreed to give him a credit for $110. 12 Zita purchases candy for add-in ice-cream mixing for $116 cash. 14 Ice-cream cash sales for the week are $1,700. (The cost of sales was $730) Week 3 April 15 Wages of $360 per employee, per week were paid to employees for the two-week period ended April 15th. Zita withheld a total of $160 ($80 from each employee) for taxes. 18 Mr. Hernandez paid for his daughter's wedding (less amount for returned ice-creams) 19 Purchased supplies for $70 on credit. Paid for ice-cream ingredients bought on April 6. 20 Purchased ice-cream ingredients for $3,880 on credit. Zita supplied ice-cream for a graduation function for La Vista Community College and prepared an invoice for $1500. Terms 3/10, n/30 (The cost of materials was $695) 21 Recorded ice-cream cash sales for the week, $3384. (The cost of ingredients was $1322) Week 4 22 Paid for supplies purchased April 19. 24 Paid $220 to 'Adriana's Ads' for advertising 26 Received gas bill of $116. 28 Recorded ice-cream cash sales for the week, $2,950. (The cost of ingredients was $1136) Week 5 29 Wages of $360 per employee, per week were paid to employees for the two-week period ended April 15th. Zita withheld a total of $160 ($80 from each employee) for taxes. 30 La Vista paid the amount owing from the April 20 graduation ceremony. Zita paid herself an amount of $600 from the business profits 3 Recorded ice-cream cash sales for the final two days $856. (The cost of ingredients was $380)

Date

Transaction

Week 1

April 1

Zita contributes $7,000 to commence the business 1

Zita borrows $15,000 from Fremont Bank for three years with interest charged at 9%

(annually) Zita hires two staff to be paid every 2 weeks (on a Thursday)

April 3

Zita signs a rent contract at a shop and pays $2,300 for two months' rent (April and May).

She purchases four ice-cream freezers for $600 each. The estimated life is 8 years using

straight line depreciation and Zita believes that she could sell the freezers at the end of

this time for $120 each.

Zita rents a portable ice-cream trailer for catering. She pays $200 for the month of

April. 

April 4

Zita purchases an ipad which will be used as a cash register for $576. The estimated life

is 4 years using straight-line depreciation.

Zita also purchases supplies (ice-cream boxes, napkins etc.) for $140 cash.

2

April 6

Zita purchases bulk ice-cream on credit from Sandhu Stores for $1,024.

Zita pays $960 for insurance for the year April 1, 2021-March 31, 2022.

1

Hint:  While  this  business  is a sole proprietorship,  you are  required  to account for  this cash  contribution  as  you would for a corporation

2

Hint: Supplies are those types of supplies that are used up in the course of doing business. They are not part of the cost of goods.

Week 2

April 10

On Saturday 10th April, Zita supplied ice-cream for Lucy Hernandez' wedding. That evening, she sent Mr. Hernandez an invoice for $810. Terms 3/10, n/30 (The cost of materials was $340)

April 11

Mr. Hernandez rang to complain that four buckets of ice-cream had melted. Zita agreed to give him a credit for $110.

April 12

Zita purchases candy for add-in ice-cream mixing for $116 cash.

April 14

Ice-cream cash sales for the week are $1,700. (The cost of sales was $730)

Week 3

April 15

Wages of $360 per employee, per week were paid to employees for the two-week period ended April 15th. Zita withheld a total of $160 ($80 from each employee) for taxes.

April 18

Mr. Hernandez paid for his daughter's wedding (less amount for returned ice-creams)

April 19

Purchased supplies for $70 on credit. Paid for ice-cream ingredients bought on April 6.

April 20

Purchased ice-cream ingredients for $3,880 on credit.

Zita supplied ice-cream for a graduation function for La Vista Community College and prepared an invoice for $1500. Terms 3/10, n/30 (The cost of materials was $695)

April 21

Recorded ice-cream cash sales for the week, $3384. (The cost of ingredients was $1322)

Week 4

April 22

Paid for supplies purchased April 19.

April 24

Paid $220 to 'Adriana's Ads' for advertising

April 26

Received gas bill of $116.

April 28 

Recorded ice-cream cash sales for the week, $2,950. (The cost of ingredients was $1136)

Week 5

April 29

Wages of $360 per employee, per week were paid to employees for the two-week period ended April 15th. Zita withheld a total of $160 ($80 from each employee) for taxes.

April 30

La Vista paid the amount owing from the April 20 graduation ceremony. Zita paid herself an amount of $600 from the business profits 3 Recorded ice-cream cash sales for the final two days $856. (The cost of ingredients was $380)