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### Company Transactions and Account Balances Analysis **Overview:** In November, Kate's greeting card business experienced a surge. Kate invested more into her business, funded partly by a $15,000 bank loan and personal funds. The loan has a 6% interest rate with semiannual payments, due in a balloon payment after two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - **Assets:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $16,000 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - **Liabilities:** - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $1,900 - Long-term Note Payable: $15,000 - **Equity:** - Common Stock: $25,000 - Retained Earnings: $30,900 **Transactions for December 2018:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid $1,800 in wages ($900 owed from November). 3. **Dec 12:** Received $5,400 from customers on account. 4. **Dec 12:** Sold $6,000 in greeting cards (cost $4,000). 5. **Dec 14:** Purchased $7,000 in inventory (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies (Other Current Assets). 7. **Dec 19:** Sold greeting cards on account (terms 2/10, n/30). 8. **Dec 21:** Paid $1,400 in wages. 9. **Dec 25:** Paid for merchandise bought on Dec 14. 10. **Dec 28:** Received full payment from customer (Dec 19 sale). 11. **Dec 31:** Recorded $900 in depreciation. 12. **Dec 31:** Year-end physical count: $13,000 in inventory, $2,000 in supplies. **(Note: Assume Other Current Assets only include supply costs.)** This detailed breakdown provides insights into the financial activities and condition of Kate's business during December 2018, focusing

### Company Transactions and Account Balances Analysis **Overview:** In November, Kate's greeting card business experienced a surge. Kate invested more into her business, funded partly by a $15,000 bank loan and personal funds. The loan has a 6% interest rate with semiannual payments, due in a balloon payment after two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - **Assets:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $16,000 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - **Liabilities:** - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $1,900 - Long-term Note Payable: $15,000 - **Equity:** - Common Stock: $25,000 - Retained Earnings: $30,900 **Transactions for December 2018:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid $1,800 in wages ($900 owed from November). 3. **Dec 12:** Received $5,400 from customers on account. 4. **Dec 12:** Sold $6,000 in greeting cards (cost $4,000). 5. **Dec 14:** Purchased $7,000 in inventory (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies (Other Current Assets). 7. **Dec 19:** Sold greeting cards on account (terms 2/10, n/30). 8. **Dec 21:** Paid $1,400 in wages. 9. **Dec 25:** Paid for merchandise bought on Dec 14. 10. **Dec 28:** Received full payment from customer (Dec 19 sale). 11. **Dec 31:** Recorded $900 in depreciation. 12. **Dec 31:** Year-end physical count: $13,000 in inventory, $2,000 in supplies. **(Note: Assume Other Current Assets only include supply costs.)** This detailed breakdown provides insights into the financial activities and condition of Kate's business during December 2018, focusing

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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### Company Transactions and Account Balances Analysis **Overview:** In November, Kate's greeting card business experienced a surge. Kate invested more into her business, funded partly by a $15,000 bank loan and personal funds. The loan has a 6% interest rate with semiannual payments, due in a balloon payment after two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - **Assets:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $16,000 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - **Liabilities:** - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $1,900 - Long-term Note Payable: $15,000 - **Equity:** - Common Stock: $25,000 - Retained Earnings: $30,900 **Transactions for December 2018:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid $1,800 in wages ($900 owed from November). 3. **Dec 12:** Received $5,400 from customers on account. 4. **Dec 12:** Sold $6,000 in greeting cards (cost $4,000). 5. **Dec 14:** Purchased $7,000 in inventory (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies (Other Current Assets). 7. **Dec 19:** Sold greeting cards on account (terms 2/10, n/30). 8. **Dec 21:** Paid $1,400 in wages. 9. **Dec 25:** Paid for merchandise bought on Dec 14. 10. **Dec 28:** Received full payment from customer (Dec 19 sale). 11. **Dec 31:** Recorded $900 in depreciation. 12. **Dec 31:** Year-end physical count: $13,000 in inventory, $2,000 in supplies. **(Note: Assume Other Current Assets only include supply costs.)** This detailed breakdown provides insights into the financial activities and condition of Kate's business during December 2018, focusing
Transcribed Image Text:### Company Transactions and Account Balances Analysis **Overview:** In November, Kate's greeting card business experienced a surge. Kate invested more into her business, funded partly by a $15,000 bank loan and personal funds. The loan has a 6% interest rate with semiannual payments, due in a balloon payment after two years. Kate uses a perpetual inventory system. **Account Balances as of December 2, 2018:** - **Assets:** - Cash: $11,900 - Accounts Receivable: $16,800 - Inventory: $16,000 - Other Current Assets: $3,600 - Computer Equipment: $38,900 - **Liabilities:** - Accumulated Depreciation: $1,600 - Accounts Payable: $13,800 - Other Current Liabilities: $1,900 - Long-term Note Payable: $15,000 - **Equity:** - Common Stock: $25,000 - Retained Earnings: $30,900 **Transactions for December 2018:** 1. **Dec 1:** Paid $1,200 for rent. 2. **Dec 7:** Paid $1,800 in wages ($900 owed from November). 3. **Dec 12:** Received $5,400 from customers on account. 4. **Dec 12:** Sold $6,000 in greeting cards (cost $4,000). 5. **Dec 14:** Purchased $7,000 in inventory (terms 2/10, n/45). 6. **Dec 15:** Paid $600 for supplies (Other Current Assets). 7. **Dec 19:** Sold greeting cards on account (terms 2/10, n/30). 8. **Dec 21:** Paid $1,400 in wages. 9. **Dec 25:** Paid for merchandise bought on Dec 14. 10. **Dec 28:** Received full payment from customer (Dec 19 sale). 11. **Dec 31:** Recorded $900 in depreciation. 12. **Dec 31:** Year-end physical count: $13,000 in inventory, $2,000 in supplies. **(Note: Assume Other Current Assets only include supply costs.)** This detailed breakdown provides insights into the financial activities and condition of Kate's business during December 2018, focusing
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