You keep them in a rented garage and drive your own truck to parks and neighbourhood special events. You use your own cell phone to take reservations for private parties and events.. Your first summer month's transactions are listed below. May 1 May 2 May 3 May 4 May 5 May 6 May 7 May 8 May 10 May 15 May 27 You set up a bank account and acquire a business credit card. The bank will charge you a fee of $12 at the end of each month. May 31 You borrow $4,000 from the bank. You deposit $3,000 of your own money into the business bank account. May 31 You rent a garage for the next six months for $400 per month, paying the full amount now. May 11 You pay a student $60 cash to distribute half of your flyers. May 31 You register your business name for $60 with Service Ontario, using the business credit card. You gave a quotation to a prospecive block party organizer, to see if he liked it May 12 and would recommend you. You would normally have asked for a $100 deposit, but as you are just starting out, you didn't do that this time. May 31 You purchase, using your business credit card, supplies for $500 plus HST. You purchase, using your business credit card, two portable generators for $1,500 each from Softie Supply. HST is included. You buy a one-year liability insurance policy for $2,400, plus 8% tax, paying cash. You purchase for $200 cash, plus HST, 150 colour flyers to advertise your business. You haven't used any yet. May 28 You now have only $150 worth of supplies left. May 31 One month's rent on your garage has expired. Two more customers hire you to set up at their events. You will charge them each $500, and they each give you a deposit of $100. Business is blowing up! You have so far collected $2,000 in cash from happy party-goers. May 31 One month of your insurance policy has expired. The bank takes its monthly charge from your account, plus an additional $16 for interest on your loan. You received your cell phone bill for the month. Of the $80, three-quarters (i.e. 75%) was business calls. You will pay it next month. One of your May 15 customers held his event today. He will pay you his balance next week. The other customer's party is next weekend. You pay four-fifths (i.e. 80%) of the balance owing on your business credit card. You will pay the rest next month.
How will IFFA record the use of the insurance on May 31?
a. decrease Prepaid Insurance $216 and increase Insurance Expense $216
b. decrease Prepaid Insurance $200 and increase Insurance Expense $200
c. decrease Prepaid Insurance $2,400 and increase Insurance Expense $2,400
d. decrease Prepaid Insurance $2,592 and increase Insurance Expense $2,592
e. no entry is required.
Enter the letter that corresponds to your choice. (A B C D E)
How will IFFA record the bank transaction on May 31?
a. decrease Cash $28, decrease Bank Loan Payable $12, increase Interest Expense $16
b. decrease Cash $28, increase Bank Fees Expense $12, increase Interest Expense $16
c. decrease Cash $28, increase Interest Expense $12, decrease Bank Fees Expense $16
d. decrease Cash $28, decrease Bank Loan Payable $16, increase Bank Fees Expense $12
e. decrease cash $28, decrease Bank Loan Payable $16, decrease
f. decrease Cash $28, decrease Bank Loan Payable $12, decrease Retained Earnings $16
Enter the letter that corresponds to your choice. (A B C D E F)
How will IFFA record the party on May 31?
a. no entry is required until the balance is paid
b. increase both Cash and Deferred Revenue, $400
c. increase both Cash and Service Revenue, $400
d. increase both
e. increase both Accounts Receivable and Service Revenue, $400
f. Increase Accounts Receivable $400, increase Service Revenue $500, and decrease Deferred Revenue $100.
Enter the letter that corresponds to your choice. (A B C D E F)
How will IFFA record the credit card payment on May 31?
a. decrease both Cash and Accounts Payable $2,945
b. decrease both Cash and Accounts Payable $2,900
c. decrease both Cash and Accounts Payable $3,565
d. decrease both Cash and Accounts Payable $3,425
e. decrease both Cash and Accounts Payable $685
Enter the letter that corresponds to your choice. (A B C D E)
What is Total Liabilities on IFFA's
What would be reported on IFFA's income statement as Total Service Revenue for the month of May?
If you were producing the company's December 31 year end financial state
Step by step
Solved in 1 steps
