Prepare closing entries. (Use Operating Expenses for Expenses) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order displayed in the problem statement.) Date Account Titles and Explanation Oct. 31 Sales Revenue Oct. 31 Oct. 31 Income Summary (To close revenue account) Income Summary Depreciation Expense Salaries and Wages Expense (To close expense accounts) Income Summary Retained Earnings (To transfer net income/(loss)) Oct. 31 Retained Earnings Cash Dividends (To close cash dividends to retained earnings) Debit 462500 383740 78760 1400 Credit 462500 3900 379840 78760 1400 Natalie and her friend Curtis Lesperance decide that they can benefit from joining Cookie Creations and Curtis's coffee shop. In this part of the problem, they want your help in preparing financial information following the first year of operations of their new business, Cookie & Coffee Creations. After establishing their company's fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2020. On that date, after the issuance of shares, the paid-in capital section of the company's balance sheet is as follows. Paid-in capital Preferred stock, $0.50 noncumulative, no par value, 10,000 shares authorized, 2,000 shares issued Common stock, no par value, 100,000 shares authorized, 25,930 shares issued $10,000 25,930 Cookie & Coffee Creations then has the following selected transactions during its first year of operations. Dec. 1 Issues an additional 800 preferred shares to Natalie's brother for $4,000. Apr. 30 June 30 Oct. 31 31 31 Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1. Repurchases 750 shares of common stock issued to the lawyer, for $500. Recall that these were originally issued for $750. The lawyer had decided to retire and wanted to liquidate all of her assets. The company has had a very successful first year of operations. It earned revenues of $462,500 and incurred expenses of $364,050 (including $750 legal fee, but excluding income tax). Records income tax expense. (The company has a 20% income tax rate.) Declares a semiannual dividend to the preferred stockholders of record on November 15, payable on December 1.
Prepare closing entries. (Use Operating Expenses for Expenses) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order displayed in the problem statement.) Date Account Titles and Explanation Oct. 31 Sales Revenue Oct. 31 Oct. 31 Income Summary (To close revenue account) Income Summary Depreciation Expense Salaries and Wages Expense (To close expense accounts) Income Summary Retained Earnings (To transfer net income/(loss)) Oct. 31 Retained Earnings Cash Dividends (To close cash dividends to retained earnings) Debit 462500 383740 78760 1400 Credit 462500 3900 379840 78760 1400 Natalie and her friend Curtis Lesperance decide that they can benefit from joining Cookie Creations and Curtis's coffee shop. In this part of the problem, they want your help in preparing financial information following the first year of operations of their new business, Cookie & Coffee Creations. After establishing their company's fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2020. On that date, after the issuance of shares, the paid-in capital section of the company's balance sheet is as follows. Paid-in capital Preferred stock, $0.50 noncumulative, no par value, 10,000 shares authorized, 2,000 shares issued Common stock, no par value, 100,000 shares authorized, 25,930 shares issued $10,000 25,930 Cookie & Coffee Creations then has the following selected transactions during its first year of operations. Dec. 1 Issues an additional 800 preferred shares to Natalie's brother for $4,000. Apr. 30 June 30 Oct. 31 31 31 Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1. Repurchases 750 shares of common stock issued to the lawyer, for $500. Recall that these were originally issued for $750. The lawyer had decided to retire and wanted to liquidate all of her assets. The company has had a very successful first year of operations. It earned revenues of $462,500 and incurred expenses of $364,050 (including $750 legal fee, but excluding income tax). Records income tax expense. (The company has a 20% income tax rate.) Declares a semiannual dividend to the preferred stockholders of record on November 15, payable on December 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Prepare closing entries. (Use Operating Expenses for Expenses) (Credit account titles are automatically indented when amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal
entries in the order displayed in the problem statement.)
Date
Account Titles and Explanation
Oct. 31
Sales Revenue
Oct. 31
Oct. 31
Income Summary
(To close revenue account)
Income Summary
Depreciation Expense
Salaries and Wages Expense
(To close expense accounts)
Income Summary
Retained Earnings
(To transfer net income/(loss))
Oct. 31
Retained Earnings
Cash Dividends
(To close cash dividends to retained earnings)
Debit
462500
383740
78760
1400
Credit
462500
3900
379840
78760
1400
Transcribed Image Text:Natalie and her friend Curtis Lesperance decide that they can benefit from joining Cookie Creations and Curtis's coffee shop. In this
part of the problem, they want your help in preparing financial information following the first year of operations of their new business,
Cookie & Coffee Creations.
After establishing their company's fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc.
on November 1, 2020. On that date, after the issuance of shares, the paid-in capital section of the company's balance sheet is as
follows.
Paid-in capital
Preferred stock, $0.50 noncumulative, no par value,
10,000 shares authorized, 2,000 shares issued
Common stock, no par value, 100,000 shares
authorized, 25,930 shares issued
$10,000
25,930
Cookie & Coffee Creations then has the following selected transactions during its first year of operations.
Dec. 1
Issues an additional 800 preferred shares to Natalie's brother for $4,000.
Apr. 30
June 30
Oct. 31
31
31
Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1.
Repurchases 750 shares of common stock issued to the lawyer, for $500. Recall that these were originally issued for
$750. The lawyer had decided to retire and wanted to liquidate all of her assets.
The company has had a very successful first year of operations. It earned revenues of $462,500 and incurred expenses
of $364,050 (including $750 legal fee, but excluding income tax).
Records income tax expense. (The company has a 20% income tax rate.)
Declares a semiannual dividend to the preferred stockholders of record on November 15, payable on December 1.
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