Question

Record the transaction:

June 15: the new store opened. SBUX determines that it has satisfied the promises made to Valentine relating to store location and training.

February 14: SBUX granted a license to Valentine Partners to operate a SBUX a store in (that's right you guessed it) the City of Brotherly Love, Philadelphia, Pennsylvania. Under the terms of the agreement SBUX will assist Valentine in determining store location and train Valentine's employees to meet SBUX standards for service before the official opening of the store. The fee for these services is $400,000 due up front. SBUX will sell coffee to Valentine on credit. Valentine will pay a 10% royalty to SBUX on every cup sold. A report of sales is due at the end of each month, but the royalty is not due until the 15th of the next month. Valentine paid the up-front fee at his date. May 26: SBUX sells $10,000 of coffee to Valentine, payment due in 45 days. June 5: The new store opened. SBUX determines that it has satisfied the promises made to Valentine relating to store location and training. June 20: SBUX receives $8,000 payment from Valentine relating to the May 26 sale. June 30: Valentine reports that it has made $40,000 of sales in June. July 5: Valentine sends one check to SBUX for the balance of its payable from coffee purchases and the royalties that it owes SBUX Balance Sheet Income Statement ny Cash Noncash )Asset Assets Contributed Earned surplus Liabilities Capital Revenues Expenses Ne

Answer 1

when a new store is opened then the entry will be:

15/june Cash a/c Dr.

To capital A/c

cash account will shown under balance sheet as cash assets

capital a/c will shown under balance sheet as contributed capital.