Scenario: Happy House Bakeshop opened for business on October 1, 2018. During the month of October, the following transactions occurred: October 1: Issued $20,000 of common stock for $20,000 cash. October 1: Purchased a delivery van for $11,000. Paid $4,000 in cash and borrowed the remainder (long-term) from the bank. October 3: Purchased baking supplies for $900 on account. October 5: Paid $1,800 on a one-year insurance policy, effective October 1. October 12: Billed customers $4,800 for baking services. October 18: Paid $1,500 of the amount owed on the van. October 18: Paid $500 of the amount owed on baking services. October 20: Paid $1,700 for employee salaries. October 21: Collected $1,200 from customers billed on October 12. October 25: Billed customers $1,900 for baking services. October 31: Paid gas and oil for the month on the delivery, $500. October 31: Paid an $800 dividend. Adjustments: (a) Earned but unbilled fees at October 31 were $2,500 (b) Depreciation for the month was $500 (c ) One-twelfth of the insurance expired (d) An inventory count showed $300 of cleaning supplies remaining on October 31 (e) Accrued but unpaid employee salaries were $500 Complete the Income Statement.
Scenario:
Happy House Bakeshop opened for business on October 1, 2018. During the month of October, the following transactions occurred:
October 1: Issued $20,000 of common stock for $20,000 cash.
October 1: Purchased a delivery van for $11,000. Paid $4,000 in cash and borrowed the remainder (long-term) from the bank.
October 3: Purchased baking supplies for $900 on account. October 5: Paid $1,800 on a one-year insurance policy, effective October 1.
October 12: Billed customers $4,800 for baking services. October 18: Paid $1,500 of the amount owed on the van.
October 18: Paid $500 of the amount owed on baking services.
October 20: Paid $1,700 for employee salaries. October 21: Collected $1,200 from customers billed on October 12. October 25: Billed customers $1,900 for baking services.
October 31: Paid gas and oil for the month on the delivery, $500. October 31: Paid an $800 dividend.
Adjustments:
(a) Earned but unbilled fees at October 31 were $2,500
(b)
(c ) One-twelfth of the insurance expired (d) An inventory count showed $300 of cleaning supplies remaining on October 31
(e) Accrued but unpaid employee salaries were $500
Complete the Income Statement.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
