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**Serial Problem: Kate’s Cards** (Note: This is a continuation from earlier chapters.) **SP5: Introduction** Kate had concerns regarding some practices of Fred Abbott, the CEO of Sentiments, believing they might harm her own company’s reputation. She focused on ensuring her business was socially responsible and aimed to produce quality greeting cards. In November, Kate's business experienced a boom. She invested in computer graphics equipment with part funding from a $15,000 bank loan, adding her funds as well. The loan's interest rate is 6% per year, with semiannual interest payments, and the principal due in two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $12,600 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $3,600 - Long-Term Note Payable: $15,000 - Common Stock: $10,000 - Retained Earnings: $30,900 **December 2018 Transactions:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid employees $1,800 (includes $900 owed from November). Wages owed are recorded under Other Current Liabilities. 3. **Dec 9:** Received $5,400 from customers on accounts receivable. 4. **Dec 12:** Sold $11,000 of greeting cards for cash (cost $6,000 to produce). 5. **Dec 14:** Purchased $7,000 of inventory on account (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies listed under Other Current Assets. 7. **Dec 19:** Sold $6,000 in greeting cards on account (terms 2/10, n/30, cost $4,000 to produce). 8. **Dec 21:** Paid $1,400 in additional wages. 9. **Dec 25:** Paid for merchandise purchased on December 14. 10. **Dec 28:** Received full payment from the sale on December 19. 11. **Dec 31:** Recorded monthly depreciation

**Serial Problem: Kate’s Cards** (Note: This is a continuation from earlier chapters.) **SP5: Introduction** Kate had concerns regarding some practices of Fred Abbott, the CEO of Sentiments, believing they might harm her own company’s reputation. She focused on ensuring her business was socially responsible and aimed to produce quality greeting cards. In November, Kate's business experienced a boom. She invested in computer graphics equipment with part funding from a $15,000 bank loan, adding her funds as well. The loan's interest rate is 6% per year, with semiannual interest payments, and the principal due in two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $12,600 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $3,600 - Long-Term Note Payable: $15,000 - Common Stock: $10,000 - Retained Earnings: $30,900 **December 2018 Transactions:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid employees $1,800 (includes $900 owed from November). Wages owed are recorded under Other Current Liabilities. 3. **Dec 9:** Received $5,400 from customers on accounts receivable. 4. **Dec 12:** Sold $11,000 of greeting cards for cash (cost $6,000 to produce). 5. **Dec 14:** Purchased $7,000 of inventory on account (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies listed under Other Current Assets. 7. **Dec 19:** Sold $6,000 in greeting cards on account (terms 2/10, n/30, cost $4,000 to produce). 8. **Dec 21:** Paid $1,400 in additional wages. 9. **Dec 25:** Paid for merchandise purchased on December 14. 10. **Dec 28:** Received full payment from the sale on December 19. 11. **Dec 31:** Recorded monthly depreciation

FINANCIAL ACCOUNTING
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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Using the information in the photo, how would I prepare Journal Entries for the December transactions?

**Serial Problem: Kate’s Cards** (Note: This is a continuation from earlier chapters.) **SP5: Introduction** Kate had concerns regarding some practices of Fred Abbott, the CEO of Sentiments, believing they might harm her own company’s reputation. She focused on ensuring her business was socially responsible and aimed to produce quality greeting cards. In November, Kate's business experienced a boom. She invested in computer graphics equipment with part funding from a $15,000 bank loan, adding her funds as well. The loan's interest rate is 6% per year, with semiannual interest payments, and the principal due in two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $12,600 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $3,600 - Long-Term Note Payable: $15,000 - Common Stock: $10,000 - Retained Earnings: $30,900 **December 2018 Transactions:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid employees $1,800 (includes $900 owed from November). Wages owed are recorded under Other Current Liabilities. 3. **Dec 9:** Received $5,400 from customers on accounts receivable. 4. **Dec 12:** Sold $11,000 of greeting cards for cash (cost $6,000 to produce). 5. **Dec 14:** Purchased $7,000 of inventory on account (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies listed under Other Current Assets. 7. **Dec 19:** Sold $6,000 in greeting cards on account (terms 2/10, n/30, cost $4,000 to produce). 8. **Dec 21:** Paid $1,400 in additional wages. 9. **Dec 25:** Paid for merchandise purchased on December 14. 10. **Dec 28:** Received full payment from the sale on December 19. 11. **Dec 31:** Recorded monthly depreciation
Transcribed Image Text:**Serial Problem: Kate’s Cards** (Note: This is a continuation from earlier chapters.) **SP5: Introduction** Kate had concerns regarding some practices of Fred Abbott, the CEO of Sentiments, believing they might harm her own company’s reputation. She focused on ensuring her business was socially responsible and aimed to produce quality greeting cards. In November, Kate's business experienced a boom. She invested in computer graphics equipment with part funding from a $15,000 bank loan, adding her funds as well. The loan's interest rate is 6% per year, with semiannual interest payments, and the principal due in two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $12,600 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $3,600 - Long-Term Note Payable: $15,000 - Common Stock: $10,000 - Retained Earnings: $30,900 **December 2018 Transactions:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid employees $1,800 (includes $900 owed from November). Wages owed are recorded under Other Current Liabilities. 3. **Dec 9:** Received $5,400 from customers on accounts receivable. 4. **Dec 12:** Sold $11,000 of greeting cards for cash (cost $6,000 to produce). 5. **Dec 14:** Purchased $7,000 of inventory on account (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies listed under Other Current Assets. 7. **Dec 19:** Sold $6,000 in greeting cards on account (terms 2/10, n/30, cost $4,000 to produce). 8. **Dec 21:** Paid $1,400 in additional wages. 9. **Dec 25:** Paid for merchandise purchased on December 14. 10. **Dec 28:** Received full payment from the sale on December 19. 11. **Dec 31:** Recorded monthly depreciation
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