#1_SEP.2019 Kate Collins has always been good at putting together rhymes for any occasion. Kate is a recent college graduate with a double major in business and art. Kate has always had a bit of an entrepreneurial streak and has decided to open her own business designing and selling greeting cards. Kate decided that she would rent a small studio where she would design the cards on a new Apple iMac that she is planning to purchase. Kate also decided to offer classes in greeting card design to other aspiring greeting card producers. After much thought, Kate decided to name her business “Kate’s Cards.” SEPTEMBER 2019: In September 2019, Kate incorporated Kate’s Cards after investigating different organizational forms, and began the process of getting her business up and running. The following events occurred during the month of September 2019: Kate deposited $10,000 that she had saved into a newly opened business checking account. She received common stock in exchange. Kate designed a brochure that she will use to promote her greeting cards at local stationery stores. Kate paid Fred Simmons $50 to critique her brochure before undertaking her final design and printing. Kate purchased a new iMac computer tablet, specialized graphic arts software, and commercial printer for the company, paying $4,800 in cash. She decided to record all of these items under the same equipment account. Kate purchased supplies such as paper and ink for $350 at the local stationery store. She opened a business account with the store and was granted 30 days credit on all purchases, including the one she just made. Kate designed her first 5 cards and prepared to show them to potential customers. The owner of the stationery store where Kate opened her account was impressed with Kate’s work and ordered 1,000 of each of the five card designs at a cost of $1 per card, or $5,000 total. Kate tells the customer that she will have them printed and delivered within the week. Kate purchased additional supplies, on account, in the amount of $1,500. Kate delivered the 5,000 cards. Because the owner knows that Kate is just starting out, he paid her immediately in cash. He informed her that if the cards sell well that he will be ordering more, but would expect a 30-day credit period like the one he grants to his own business customers. The cost to Kate for the order was $1,750 of the supplies she had purchased. (Hint: This cost should be recorded as a debit to an expense called Cost of Goods Sold.) Kate paid her balance due for the supplies in full. Kate purchased a one-year insurance policy for $1,200, paying the entire amount in cash. (Hint: Two accounts will need to be debited here, one for the current month expense and one for the prepaid amount.) Kate determined that all of her equipment will have a useful life of 4 years (48 months) at which time it will not have any resale or scrap value. (Hint: Kate will expense 1/48th of the cost of the equipment each month to Depreciation Expense. The credit will be to Accumulated Depreciation.) Kate paid herself a salary of $1,000 for the month. Kate paid rent expense for the month in the amount of $1,200. September Requirements: Prepare a general ledger with the following accounts: Cash; Accounts Receivable; Supplies Inventory; Prepaid Insurance; Equipment; Accumulated Depreciation; Accounts Payable; Common Stock; Retained Earnings; Sales Revenue; Cost of Goods Sold; Consulting Expense; Insurance Expense; Depreciation Expense; Wages Expense; Rent Expense. Prepare journal entries for the above transactions using these accounts. Post the accounting transactions for the month of September 2019 to the general ledger accounts. Prepare a trial balance for Kate’s Cards as of September 30, 2019.

#1_SEP.2019 Kate Collins has always been good at putting together rhymes for any occasion. Kate is a recent college graduate with a double major in business and art. Kate has always had a bit of an entrepreneurial streak and has decided to open her own business designing and selling greeting cards. Kate decided that she would rent a small studio where she would design the cards on a new Apple iMac that she is planning to purchase. Kate also decided to offer classes in greeting card design to other aspiring greeting card producers. After much thought, Kate decided to name her business “Kate’s Cards.” SEPTEMBER 2019: In September 2019, Kate incorporated Kate’s Cards after investigating different organizational forms, and began the process of getting her business up and running. The following events occurred during the month of September 2019: Kate deposited $10,000 that she had saved into a newly opened business checking account. She received common stock in exchange. Kate designed a brochure that she will use to promote her greeting cards at local stationery stores. Kate paid Fred Simmons $50 to critique her brochure before undertaking her final design and printing. Kate purchased a new iMac computer tablet, specialized graphic arts software, and commercial printer for the company, paying $4,800 in cash. She decided to record all of these items under the same equipment account. Kate purchased supplies such as paper and ink for $350 at the local stationery store. She opened a business account with the store and was granted 30 days credit on all purchases, including the one she just made. Kate designed her first 5 cards and prepared to show them to potential customers. The owner of the stationery store where Kate opened her account was impressed with Kate’s work and ordered 1,000 of each of the five card designs at a cost of $1 per card, or $5,000 total. Kate tells the customer that she will have them printed and delivered within the week. Kate purchased additional supplies, on account, in the amount of $1,500. Kate delivered the 5,000 cards. Because the owner knows that Kate is just starting out, he paid her immediately in cash. He informed her that if the cards sell well that he will be ordering more, but would expect a 30-day credit period like the one he grants to his own business customers. The cost to Kate for the order was $1,750 of the supplies she had purchased. (Hint: This cost should be recorded as a debit to an expense called Cost of Goods Sold.) Kate paid her balance due for the supplies in full. Kate purchased a one-year insurance policy for $1,200, paying the entire amount in cash. (Hint: Two accounts will need to be debited here, one for the current month expense and one for the prepaid amount.) Kate determined that all of her equipment will have a useful life of 4 years (48 months) at which time it will not have any resale or scrap value. (Hint: Kate will expense 1/48th of the cost of the equipment each month to Depreciation Expense. The credit will be to Accumulated Depreciation.) Kate paid herself a salary of $1,000 for the month. Kate paid rent expense for the month in the amount of $1,200. September Requirements: Prepare a general ledger with the following accounts: Cash; Accounts Receivable; Supplies Inventory; Prepaid Insurance; Equipment; Accumulated Depreciation; Accounts Payable; Common Stock; Retained Earnings; Sales Revenue; Cost of Goods Sold; Consulting Expense; Insurance Expense; Depreciation Expense; Wages Expense; Rent Expense. Prepare journal entries for the above transactions using these accounts. Post the accounting transactions for the month of September 2019 to the general ledger accounts. Prepare a trial balance for Kate’s Cards as of September 30, 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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#1_SEP.2019

Kate Collins has always been good at putting together rhymes for any occasion. Kate is a recent college graduate with a double major in business and art. Kate has always had a bit of an entrepreneurial streak and has decided to open her own business designing and selling greeting cards. Kate decided that she would rent a small studio where she would design the cards on a new Apple iMac that she is planning to purchase. Kate also decided to offer classes in greeting card design to other aspiring greeting card producers. After much thought, Kate decided to name her business “Kate’s Cards.”

SEPTEMBER 2019:

In September 2019, Kate incorporated Kate’s Cards after investigating different organizational forms, and began the process of getting her business up and running. The following events occurred during the month of September 2019:

Kate deposited $10,000 that she had saved into a newly opened business checking account. She received common stock in exchange.
Kate designed a brochure that she will use to promote her greeting cards at local stationery stores.
Kate paid Fred Simmons $50 to critique her brochure before undertaking her final design and printing.
Kate purchased a new iMac computer tablet, specialized graphic arts software, and commercial printer for the company, paying $4,800 in cash. She decided to record all of these items under the same equipment account.
Kate purchased supplies such as paper and ink for $350 at the local stationery store. She opened a business account with the store and was granted 30 days credit on all purchases, including the one she just made.
Kate designed her first 5 cards and prepared to show them to potential customers.
The owner of the stationery store where Kate opened her account was impressed with Kate’s work and ordered 1,000 of each of the five card designs at a cost of $1 per card, or $5,000 total. Kate tells the customer that she will have them printed and delivered within the week.
Kate purchased additional supplies, on account, in the amount of $1,500.
Kate delivered the 5,000 cards. Because the owner knows that Kate is just starting out, he paid her immediately in cash. He informed her that if the cards sell well that he will be ordering more, but would expect a 30-day credit period like the one he grants to his own business customers.
The cost to Kate for the order was $1,750 of the supplies she had purchased. (Hint: This cost should be recorded as a debit to an expense called Cost of Goods Sold.)
Kate paid her balance due for the supplies in full.
Kate purchased a one-year insurance policy for $1,200, paying the entire amount in cash. (Hint: Two accounts will need to be debited here, one for the current month expense and one for the prepaid amount.)
Kate determined that all of her equipment will have a useful life of 4 years (48 months) at which time it will not have any resale or scrap value. (Hint: Kate will expense 1/48th of the cost of the equipment each month to Depreciation Expense. The credit will be to Accumulated Depreciation.)
Kate paid herself a salary of $1,000 for the month.
Kate paid rent expense for the month in the amount of $1,200.

September Requirements:

Prepare a general ledger with the following accounts: Cash; Accounts Receivable; Supplies Inventory; Prepaid Insurance; Equipment; Accumulated Depreciation; Accounts Payable; Common Stock; Retained Earnings; Sales Revenue; Cost of Goods Sold; Consulting Expense; Insurance Expense; Depreciation Expense; Wages Expense; Rent Expense. Prepare journal entries for the above transactions using these accounts.
Post the accounting transactions for the month of September 2019 to the general ledger accounts.
Prepare a trial balance for Kate’s Cards as of September 30, 2019.

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