Getting ready for the upcoming holiday season is traditionally a busy time for greeting card companies, and it was no exception for Kate. The following transactions occurred during the month of October: Hired an assistant at an hourly rate of $10 per hour to help with some of the computer layouts and administrative chores. Supplements her business by teaching a class to aspiring card designers. She charges and receives a total of $450.
Getting ready for the upcoming holiday season is traditionally a busy time for greeting card companies, and it was no exception for Kate. The following transactions occurred during the month of October: Hired an assistant at an hourly rate of $10 per hour to help with some of the computer layouts and administrative chores. Supplements her business by teaching a class to aspiring card designers. She charges and receives a total of $450.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
OCTOBER 2019:
Getting ready for the upcoming holiday season is traditionally a busy time for greeting card companies, and it was no exception for Kate. The following transactions occurred during the month of October:
- Hired an assistant at an hourly rate of $10 per hour to help with some of the computer layouts and administrative chores.
- Supplements her business by teaching a class to aspiring card designers. She charges and receives a total of $450.
- Delivers greeting cards to several new customers. She bills them a total of $3,500.
- Pays a utility bill in the amount of $250 that she determines is the business portion of her utility bill.
- Receives an advance deposit of $500 for a new set of cards she is designing for a new customer.
- Pays her assistant $200 for the work done this month.
- Determines that the assistant has worked 10 additional hours this month that have not yet been paid.
- Ordered and receives additional supplies in the amount of $1,000. These were paid for during the month.
- Counts her remaining inventory of supplies at the end of the month and determines the balance to be $300. Don’t forget to consider the supplies inventory balance at September 30, from Chapter 2. (Hint: This expense will be a debit to Cost of Goods Sold.)
- Records the
adjusting entries fordepreciation and insurance expense for the month. - Pays herself a salary of $1,000.
- Paid monthly rent of $1,200 in cash.
- Receives her next utility bill during December and determines $85 applies to October’s operations.
- Deciding she needs a little more cash, Kate pays herself a $100 dividend.
October Requirements:
- Prepare a
trial balance as of October 31, 2019.
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