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CCC5 CONTINUING COOKIE CHRONICLE
(a) Responses to Natalie’s questions
1. The mixers should be classified as inventory as they are for
resale.
2. A perpetual inventory system will provide better control over
(b)
General Journal
Date
Account Titles and Explanation
Debit
Credit
Jan. 4
Inventory ...................................................
2,750
Accounts Payable ..............................
2,750
6
Inventory ...................................................
100
Cash ....................................................
100
CONTINUING COOKIE CHRONICLE (Continued)
(b) (Continued)
General Journal
Date
Account Titles and Explanation
Debit
Credit
Jan. 14
Inventory .....................................................
2,200
Accounts Payable ...............................
2,200
20
Cash ............................................................
2,200
Sales Revenue .....................................
2,200
20
Cost of Goods Sold ($570 X 2) ..................
1,140
Inventory ..............................................
1,140
CONTINUING COOKIE CHRONICLE (Continued)
(b) and (d)
Cash
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
1,340
6
100
1,240
8
450
1,690
13
75
1,615
14
75
1,540
Accounts Receivable
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
1,450
8
450
1,000
Inventory
Date
Explanation
Debit
Credit
Balance
Jan. 4
2,750
2,750
6
100
2,850
CONTINUING COOKIE CHRONICLE (Continued)
(b) and (d) (Continued)
Supplies
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
400
Prepaid Insurance
Date
Explanation
Debit
Credit
Balance
Equipment
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
1,200
Accumulated Depreciation—Equipment
Date
Explanation
Debit
Credit
Balance
Website
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
575
CONTINUING COOKIE CHRONICLE (Continued)
(b) and (d) (Continued)
Accounts Payable
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
75
4
2,750
2,825
7
570
2,255
Salaries and Wages Payable
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
56
28
56
0
Interest Payable
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
23
CONTINUING COOKIE CHRONICLE (Continued)
(b) and (d) (Continued)
Common Stock
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
800
17
1,000
1,800
Retained Earnings
Date
Explanation
Debit
Credit
Balance
Sales Revenue
Date
Explanation
Debit
Credit
Balance
Jan. 12
3,300
3,300
20
2,200
5,500
Cost of Goods Sold
Date
Explanation
Debit
Credit
Balance
Jan. 12
1,710
1,710
Utilities Expense
Date
Explanation
Debit
Credit
Balance
Jan. 31
Adjusting entry
75
75
CONTINUING COOKIE CHRONICLE (Continued)
(b) and (d) (Continued)
Depreciation Expense
Date
Explanation
Debit
Credit
Balance
Jan. 31
Adjusting entry
20
20
Amortization Expense
Date
Explanation
Debit
Credit
Balance
Jan. 31
Adjusting entry
25
25
(c)
COOKIE CREATIONS INC.
Trial Balance
January 31, 2018
Debit
Credit
Cash .................................................................................
$ 2,614
Unearned Service Revenue ...........................................
360
Notes Payable .................................................................
2,000
Common Stock ...............................................................
1,800
Retained Earnings ..........................................................
2,711
Dividends ........................................................................
750
CONTINUING COOKIE CHRONICLE (Continued)
(d)
General Journal
Date
Account Titles and Explanation
Debit
Credit
Jan.
31
Depreciation Expense ....................................
20
Accumulated Depreciation—
Equipment ...............................................
20
31
Amortization Expense ....................................
25
Website ........................................................
25
CONTINUING COOKIE CHRONICLE (Continued)
(e)
COOKIE CREATIONS INC.
Adjusted Trial Balance
January 31, 2018
Debit
Credit
Cash ..............................................................................
$ 2,614
Accounts Receivable ..................................................
1,000
Inventory ......................................................................
1,710
Supplies .......................................................................
400
Retained Earnings .......................................................
2,711
Dividends .....................................................................
750
Sales Revenue .............................................................
5,500
Cost of Goods Sold .....................................................
2,850
Salaries and Wages Expense .....................................
160
CONTINUING COOKIE CHRONICLE (Continued)
(f)
COOKIE CREATIONS INC.
Income Statement
For the Month Ended January 31, 2018
Sales revenue ............................................................
$5,500
Cost of goods sold ...................................................
2,850
Gross profit ...............................................................
2,650
Operating expenses
Salaries and wages expense .............................
$160
Insurance expense .............................................
100
Utilities expense .................................................
75
(Sal. rev. – COGS – tot. oper. exp. – int. exp.)
COOKIE CREATIONS INC.
Retained Earnings Statement
For the Month Ended January 31, 2018
Retained earnings, January 1 ..................................
$2,711
CONTINUING COOKIE CHRONICLE (Continued)
(g)
COOKIE CREATIONS INC.
Balance Sheet
January 31, 2018
Assets
Current assets
Cash ..................................................................
$2,614
Accounts receivable ........................................
1,000
Inventory ..........................................................
1,710
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ............................................
$ 75
Unearned service revenue ..............................
360
Total current liabilities ....................................
$ 435
