Continuing Cookie Chronicle Chapter 3

(a)
GENERAL JOURNAL
Date
Nov.

Account Titles and Explanation

30

30

30

30

30

30

Debit

Advertising Supplies Expense ($95 $75)

Advertising Supplies

20

Baking Supplies Expense

Baking Supplies

25

Depreciation ExpenseBaking Equipment

Accumulated Depreciation
Baking Equipment ($1,200 60)

20

Credit
20

25

20

Interest Expense ($2,000 X .06 X .5/12)

Interest Payable

5
5

Accounts Receivable
Teaching Revenue

250

Telephone Expense
Accounts Payable

50

250

50

Cash
Date
Nov.

Explanation
30

Balance

Ref.

Debit

Credit

Balance
305

Accounts Receivable
Date
Nov.

Explanation
30

Ref.
J2

Debit

Credit

250

Balance
250

Advertising Supplies
Date
Nov.

Explanation
30
30

Balance

Ref.

J2

Debit

Credit

Balance

20

95
75

Baking Supplies
Date
Nov.

Explanation
30
30

Balance

Ref.

Debit

J2

Credit

Balance

25

125
100

Credit

Balance

Prepaid Insurance
Date
Nov.

Explanation
30

Balance

Ref.

Debit

1,200

Baking Equipment
Date
Nov.

30

Explanation

Ref.

Balance

Debit

Credit

Balance
1,200

Accumulated DepreciationBaking Equipment

Date
Nov.

Explanation
30

Ref.

Debit

Credit

Balance

20

20

Credit

Balance

Website
Date
Nov.

Explanation
30

Balance

Ref.

Debit

600

Accounts Payable
Date
Nov.

Explanation
30
30

Balance

Ref.

Debit

J2

Credit

Balance

50

600
650

Credit

Balance

Interest Payable
Date
Nov.

Explanation
30

Ref.

Debit

J2
Unearned Revenue

Date
Nov.

Explanation
30

Balance

Ref.

Debit

Credit

Balance
25

Notes Payable
Date
Nov.

Explanation
30

Balance

Ref.

Debit

Credit

Balance
2,000

Common Stock
Date
Nov.

Explanation
30

Balance

Ref.

Debit

Credit

Balance
800

Teaching Revenue
Date
Nov.

Explanation
30
30

Balance

Ref.

Debit

J2

Credit

Balance

250

100
350

Credit

Balance

Telephone Expense
Date
Nov.

Explanation
30

Ref.

Debit

J2

50

50

Advertising Supplies Expense

Date
Nov.

Explanation
30

Ref.

Debit

J2

Credit

Balance

20

20

Baking Supplies Expense

Date
Nov.

Explanation
30

Ref.

Debit

J2

Credit

Balance

25

25

Depreciation ExpenseBaking Equipment

Date
Nov.

Explanation
30

Ref.

Debit

J2

Credit

Balance

20

20

Interest Expense
Date
Nov.

Explanation
30

Ref.

Debit

J2

Credit

Balance
5

(b)
COOKIE CREATIONS
Adjusted Trial Balance
November 30, 2005

Cash..............................................................................................
Accounts Receivable....................................................................
Advertising Supplies.....................................................................
Baking Supplies............................................................................
Prepaid Insurance.........................................................................
Baking Equipment........................................................................
Accumulated DepreciationBaking Equipment...........................
Website.........................................................................................
Accounts Payable.........................................................................
Interest Payable.............................................................................
Unearned Revenue........................................................................
Note Payable.................................................................................
Common Stock.............................................................................
Teaching Revenue.........................................................................
Telephone Expense.......................................................................
Advertising Supplies Expense......................................................
Baking Supplies Expense.............................................................
Depreciation ExpenseBaking Equipment.................................
Interest Expense............................................................................
Totals............................................................................................

Debit
$305
250
75
100
1,200
1,200

Credit

$ 20
600
650
5
25
2,000
800
350
50
20
25
20
5
$3,850

0,000
$3,850

(c)
COOKIE CREATIONS
Income Statement
Month Ended November 30, 2005

Revenues
Teaching revenue...................................................................
Expenses
Telephone expense.................................................................
Baking supplies expense........................................................
Advertising supplies expense.................................................
Depreciation expense.............................................................
Interest expense......................................................................
Net income....................................................................................

$350
$50
25
20
20
5

120
$230

COOKIE CREATIONS
Retained Earnings Statement
For the Month Ended November 30, 2005
Retained earnings, November 1............................................................................
Add: Net income...................................................................................................
Deduct: Dividends Declared.................................................................................
Retained earnings, November 30.........................................................................

$0
230
0
$230

COOKIE CREATIONS
Balance Sheet
November 30, 2005

Assets
Cash....................................................................................................
Accounts receivable............................................................................
Advertising supplies...........................................................................
Banking supplies.................................................................................
Prepaid insurance................................................................................
Website................................................................................................
Baking equipment...............................................................................
Less: Accumulated depreciationbaking
equipment.................................................................................
Total assets...............................................................................

$ 305
250
75
100
1,200
600
$1,200
20

1,180
$3,710

Liabilities and Stockholders Equity

Liabilities
Notes payable...................................................................................................
Accounts payable.............................................................................................
Interest payable................................................................................................
Unearned revenue............................................................................................
Total liabilities...........................................................................................

$2,000
650
5
25
2,680

Stockholders equity
Common stock..................................................................................................
$800
Retained earnings.............................................................................................230
Total liabilities and stockholders equity.....................................................

1,030
$3,710