picture 1 is purchasing list. Hugs and Kisses, Inc.FIFO Income Statement For the Four Months Ended Dec 31, 2023 Sales Revenue$6,000 Cost of Goods Sold 1745 Gross Profit$4,255 Operating Expenses: Rent Expense1,600 Utilities800 Advertising100 Depreciation of furniture and fixtures 250 Depreciation of computer 250 Legal fees400 Insurance (four months)300 Supplies200 Total operating expenses3,900 Net Income$355 On September 1, when Betty Anne began business, she paid $4,800 for one year’s rent in advance.Also, on September 1, one year’s insurance of $900 was paid.Supplies were originally purchased for the store costing $400.Betty Anne is not sure how much was in her checking account at the end of the year, since a lot of items are not dated. But she does know that she had $50 in the cash register.Betty Anne owed suppliers $150 on December 31 for purchases of kisses.At the start of her business, Betty Anne’s brother, Jerry, loaned her $5,000 and she gave him a promissory note in exchange. She is not paying him any interest since she is hoping to pay off the loan this year.When she first formed her corporation, Betty Anne purchased common stock for $15,670.Prepare a Cash Balance Calculation and a (unclassified) balance sheet for Hugs and Kisses, Inc. as of December 31, 2023, based on the above information. (Check figure: ending cash balance $7,850.) SalesKisses (10,000 units at $.05 each)$500Other sales (special orders)5,500ExpensesChocolate for special orders1,500Rent (four months)1,600Utilities800Advertising100Depreciation of furniture and fixtures250Cost $7,500 10-year life, 4 monthsDepreciation of computer250Cost$2,250 3-year life, 4 monthsLegal fees400Insurance (four months)300200SuppliesBalance Sheet Data:Note: Numbers in boxes can be referenced for your solution.1. On September 1, when Betty Anne began business, she paid2. Also, on September 1, one-year's insurance of$9003. Supplies were originally purchased for the store costing4. Betty Anne is not sure how much was in her checking accountcash in checking accc But she does know that she had$50Account payable5. Betty Anne owed suppliers$150$4,800 for one year's rent in advance.was paid.$400at the end of the year, since a lot of items are not dated.in the cash register.on December 31 for purchases of kisses.$5,000 and she gave him a promissory note in exchange.6. At the start of her business, Betty Anne's brother, Jerry, loaned herShe is not paying him any interest since she is hoping to pay off the loan this year.7. When she first formed her corporation, Betty Anne purchased(you may have to research what to do with the $5,670.)1,000 shares of $10 par value common stock for $15,670 DateQuantity of KissesCost per unitAugust 151,500$.02September 212,000$.02October 314,000$.025November 302,000$.03December 153,000$.03

Hugs and Kisses Inc has started business on 1st Sep. For calculating cash balance we have to…

Answered: Prepare a Cash Balance Calculation and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

100%

picture 1 is purchasing list.

Hugs and Kisses, Inc.
FIFO Income Statement
For the Four Months Ended Dec 31, 2023

Sales Revenue	$6,000
Cost of Goods Sold	1745
Gross Profit	$4,255
Operating Expenses:
Rent Expense	1,600
Utilities	800
Advertising	100
Depreciation of furniture and fixtures	250
Depreciation of computer	250
Legal fees	400
Insurance (four months)	300
Supplies	200
Total operating expenses	3,900
Net Income	$355

On September 1, when Betty Anne began business, she paid $4,800 for one year’s rent in advance.
Also, on September 1, one year’s insurance of $900 was paid.
Supplies were originally purchased for the store costing $400.
Betty Anne is not sure how much was in her checking account at the end of the year, since a lot of items are not dated. But she does know that she had $50 in the cash register.
Betty Anne owed suppliers $150 on December 31 for purchases of kisses.
At the start of her business, Betty Anne’s brother, Jerry, loaned her $5,000 and she gave him a promissory note in exchange. She is not paying him any interest since she is hoping to pay off the loan this year.
When she first formed her corporation, Betty Anne purchased common stock for $15,670.

Prepare a Cash Balance Calculation and a (unclassified) balance sheet for Hugs and Kisses, Inc. as of December 31, 2023, based on the above information. (Check figure: ending cash balance $7,850.)

Sales
Kisses (10,000 units at $.05 each)
$500
Other sales (special orders)
5,500
Expenses
Chocolate for special orders
1,500
Rent (four months)
1,600
Utilities
800
Advertising
100
Depreciation of furniture and fixtures
250
Cost $7,500 10-year life, 4 months
Depreciation of computer
250
Cost
$2,250 3-year life, 4 months
Legal fees
400
Insurance (four months)
300
200
Supplies
Balance Sheet Data:
Note: Numbers in boxes can be referenced for your solution.
1. On September 1, when Betty Anne began business, she paid
2. Also, on September 1, one-year's insurance of
$900
3. Supplies were originally purchased for the store costing
4. Betty Anne is not sure how much was in her checking account
cash in checking accc But she does know that she had
$50
Account payable
5. Betty Anne owed suppliers
$150
$4,800 for one year's rent in advance.
was paid.
$400
at the end of the year, since a lot of items are not dated.
in the cash register.
on December 31 for purchases of kisses.
$5,000 and she gave him a promissory note in exchange.
6. At the start of her business, Betty Anne's brother, Jerry, loaned her
She is not paying him any interest since she is hoping to pay off the loan this year.
7. When she first formed her corporation, Betty Anne purchased
(you may have to research what to do with the $5,670.)
1,000 shares of $10 par value common stock for $15,670

Date
Quantity of Kisses
Cost per unit
August 15
1,500
$.02
September 21
2,000
$.02
October 31
4,000
$.025
November 30
2,000
$.03
December 15
3,000
$.03

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.