CC3 COOKIE CREATIONS
(a)
GENERAL JOURNAL
J2
Date
Account Titles and Explanation
Debit
Credit
Nov. 30 Supplies Expense ……………………………………… 35
Supplies ……………………………………………….. 35
30 Depreciation Expense ……………………………….. 20
Accumulated Depreciation—Equipment
[($300 + $900) ÷ 60 months] ……………….. 20
CC3 (Continued)
The trial balance from Chapter 2 is presented below.
COOKIE CREATIONS
Trial Balance
November 30, 2016
Debit Credit
Cash ………………………………………………………………… $ 245
Supplies …………………………………………………………… 125
Prepaid Insurance …………………………………………….. 1,320
Instructions
Using the trial balance from Chapter 2, and based on the new information
above, do the following.
(a) Prepare and post the adjusting journal entries.
(b) Prepare an adjusted trial balance.
(c) Using the adjusted trial balance, calculate Cookie Creations’ net
income or net loss for the month of November 2016.
CC3 (Continued)
(a) (Continued)
Cash
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 Balance ✓ 245
Accounts Receivable
Date
Explanation
Ref.
Debit
Credit
Balance
Supplies
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 Balance ✓ 125
30 J2 35 90
Prepaid Insurance
Date
Explanation
Ref.
Debit
Credit
Balance
Equipment
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 Balance ✓ 1,200
Accumulated Depreciation—Equipment
Date
Explanation
Ref.
Debit
Credit
Balance
CC3 (Continued)
(a) (Continued)
Accounts Payable
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 J2 45 45
Interest Payable
Date
Explanation
Ref.
Debit
Credit
Balance
Unearned Service Revenue
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 Balance ✓ 30
Notes Payable
Date
Explanation
Ref.
Debit
Credit
Balance
Date
Explanation
Ref.
Debit
Credit
Balance
Service Revenue
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 Balance ✓ 125
30 J2 300 425
CC3 (Continued)
(a) (Continued)
Utilities Expense
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 J2 45 45
Advertising Expense
Date
Explanation
Ref.
Debit
Credit
Balance
Supplies Expense
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 J2 35 35
Depreciation Expense
Date
Explanation
Ref.
Debit
Credit
Balance
Interest Expense
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 30 J2 5 5
CC3 (Continued)
(b) COOKIE CREATIONS
Adjusted Trial Balance
November 30, 2016
Account Debit Credit
Cash …………………………………………………………………… $ 245
Accounts Receivable …………………………………………… 300
Supplies ……………………………………………………………… 90
Prepaid Insurance ……………………………………………….. 1,320
CC3 (Continued)
(c) COOKIE CREATIONS
Income Statement
For the Month Ended November 30, 2016
Revenues
Service revenue …………………………………………………… $425
Expenses
Advertising expense…………………………………………….. $65
Utilities expense ………………………………………………….. 45
Yes, Cookie Creations has been profitable in November. It has a profit of
$255 which is more than one half of the revenue earned in November.
[Note: Owner’s Equity Statement is not required—shown for information
purposes only.]
COOKIE CREATIONS
Owner’s Equity Statement
For the Month Ended November 30, 2016
Owner’s Capital, November 1, 2016 ……………………………… $ 0
CC3 (Continued)
(c) (Continued)
[Note: Balance Sheet is not required—shown for information purposes
only.]
COOKIE CREATIONS
Balance Sheet
November 30, 2016
Assets
Cash …………………………………………………………………….. $ 245
Accounts receivable ………………………………………………. 300
Supplies ……………………………………………………………….. 90
Liabilities and Owner’s Equity
Liabilities
Notes payable …………………………………………………… $2,000
Accounts payable ……………………………………………… 45