Cookie Creations
Part 3
(a)
GENERAL JOURNAL
Date
Nov.
J2
Account Titles and Explanation
30
30
30
30
30
30
Debit
Advertising Supplies Expense ($95 – $75)
Advertising Supplies
20
Baking Supplies Expense
Baking Supplies
25
Depreciation Expense—Baking Equipment
Accumulated Depreciation—
Baking Equipment ($1,200 ÷ 60)
20
Credit
20
25
20
Interest Expense ($2,000 X .06 X .5/12)
Interest Payable
5
5
Accounts Receivable
Teaching Revenue
250
Telephone Expense
Accounts Payable
50
250
50
Cash
Date
Nov.
Explanation
30
Ref.
Debit
Credit
Balance
Balance
305
Accounts Receivable
Date
Nov.
Explanation
Ref.
30
J2
Debit
Credit
250
Balance
250
Advertising Supplies
Date
Nov.
Explanation
30
30
Ref.
Debit
Credit
Balance
20
95
75
Balance
J2
Page 1 of 6
(a) (Continued)
Baking Supplies
Date
Nov.
Explanation
30
30
Ref.
Debit
Credit
Balance
25
125
100
Credit
Balance
Balance
J2
Prepaid Insurance
Date
Nov.
Explanation
30
Ref.
Debit
Balance
1,200
Baking Equipment
Date
Nov.
Explanation
30
Ref.
Debit
Credit
Balance
Balance
1,200
Accumulated Depreciation—Baking Equipment
Date
Nov.
Explanation
Ref.
Debit
30
Credit
Balance
20
20
Credit
Balance
Website
Date
Nov.
Explanation
30
Ref.
Debit
Balance
600
Accounts Payable
Date
Nov.
Explanation
30
30
Ref.
Debit
Credit
Balance
J2
Balance
50
600
650
Credit
Balance
5
5
Interest Payable
Date
Nov.
Explanation
Ref.
30
Debit
J2
Unearned Revenue
Date
Nov.
Explanation
30
Ref.
Balance
Debit
Credit
Balance
25
Page 2 of 6
(a) (Continued)
Notes Payable
Date
Nov.
Explanation
30
Ref.
Debit
Credit
Balance
Balance
2,000
Common Stock
Date
Nov.
Explanation
30
Ref.
Debit
Credit
Balance
Balance
800
Teaching Revenue
Date
Nov.
Explanation
30
30
Ref.
Debit
Credit
Balance
250
100
350
Credit
Balance
Balance
J2
Telephone Expense
Date
Nov.
Explanation
Ref.
30
Debit
J2
50
Ref.
Debit
50
Advertising Supplies Expense
Date
Nov.
Explanation
30
J2
Credit
Balance
20
20
Baking Supplies Expense
Date
Nov.
Explanation
Ref.
30
Debit
J2
Credit
Balance
25
25
Depreciation Expense—Baking Equipment
Date
Nov.
Explanation
Ref.
30
Debit
J2
Credit
Balance
20
20
Interest Expense
Date
Nov.
Explanation
30
Page 3 of 6
Ref.
Debit
J2
5
Credit
Balance
5
(b)
COOKIE CREATIONS
Adjusted Trial Balance
November 30, 2007
Debit
Cash ..........................................................................................
Accounts Receivable .................................................................
Advertising Supplies ..................................................................
Baking Supplies .........................................................................
Prepaid Insurance......................................................................
Baking Equipment......................................................................
Accumulated Depreciation—Baking Equipment ...........................
Website .....................................................................................
Accounts Payable ......................................................................
Interest Payable .........................................................................
Unearned Revenue....................................................................
Note Payable .............................................................................
Common Stock ..........................................................................
Teaching Revenue.....................................................................
Telephone Expense ...................................................................
Advertising Supplies Expense....................................................
Baking Supplies Expense ..........................................................
Depreciation Expense—Baking Equipment................................
Interest Expense ........................................................................
Totals.........................................................................................
Page 4 of 6
Credit
$ 305
250
75
100
1,200
1,200
$
20
600
650
5
25
2,000
800
350
50
20
25
20
5
$3,850
0,000
$3,850
(c)
COOKIE CREATIONS
Income Statement
Month Ended November 30, 2007
Revenues
Teaching revenue ...............................................................
Expenses
Telephone expense .............................................................
Baking supplies expense .....................................................
Advertising supplies expense ..............................................
Depreciation expense..........................................................
Interest expense..................................................................
Net income ................................................................................
$350
$50
25
20
20
5
120
$230
COOKIE CREATIONS
Retained Earnings Statement
For the Month Ended November 30, 2007
Retained earnings, November 1 .......................................................................
Add: Net income ...............................................................................................
Deduct: Dividends Declared .............................................................................
Retained earnings, November 30 .....................................................................
Page 5 of 6
$
0
230
0
$230
(c) (Continued)
COOKIE CREATIONS
Balance Sheet
November 30, 2007
Assets
Cash ................................................................................................
Accounts receivable .........................................................................
Advertising supplies .........................................................................
Banking supplies..............................................................................
Prepaid insurance ............................................................................
Website ...........................................................................................
Baking equipment ............................................................................
Less: Accumulated depreciation—baking
equipment .............................................................................
Total assets ..........................................................................
$ 305
250
75
100
1,200
600
$1,200
20
1,180
$3,710
Liabilities and Stockholders’ Equity
Liabilities
Notes payable ...............................................................................................
Accounts payable .........................................................................................
Interest payable ............................................................................................
Unearned revenue ........................................................................................
Total liabilities .........................................................................................
$2,000
650
5
25
2,680
Stockholders’ equity
Common stock ..............................................................................................
$800
Retained earnings.........................................................................................230
Total liabilities and stockholders’ equity ...................................................
1,030
$3,710
Page 6 of 6