Question

This problem is based on the transactions for the Sweet Homes Company in your text. Prepare journal entries for each transaction and identify the financial statement impact of each entry. The financial statements are automatically generated based on the journal entries recorded. Dec. 1 On December 1, Mike Sweet forms a consulting business, named Sweet Homes. Sweet Homes receives $68,000 cash from Mike Sweet as an owner contribution. Dec. 2 Sweet Homes pays $4,400 cash for supplies. The company's policy is to record all prepaid expenses in asset accounts. Dec. 3 Sweet Homes pays $52,000 cash for equipment. Dec. 4 Sweet Homes purchases $10,000 of supplies on credit from a supplier, CalTech Supply. Dec. 5 Sweet Homes provides consulting services and immediately collects $6,100 cash. Dec. 6 Sweet Homes pays $2,900 cash for December rent. Dec. 7 Sweet Homes pays $1,400 cash for employee salary. Dec. 8 Sweet Homes provides consulting services of $4,300 and rents its test facilities for $3,000. The customer is billed $7,300 for these services. Dec. 9 Sweet Homes receives $7,300 cash from the client billed on December 8. Dec. 10 Sweet Homes pays CalTech Supply $2,800 cash as partial payment for its December 4 $10,000 purchase of supplies. Dec. 11 Mike Sweet withdraws $1,300 cash from Sweet Homes for personal use. Dec. 12 Sweet Homes receives $4,100 cash in advance of providing consulting services to a customer. The company's policy is to record fees collected in advance in a balance sheet account. Dec. 13 Sweet Homes pays $4,300 cash (insurance premium) for a 24-month insurance policy. Coverage begins on December 1. The company's policy is to record all prepaid expenses in a balance sheet account. Dec. 14 Sweet Homes pays $2,020 cash for supplies. Dec. 15 Sweet Homes pays $2,205 cash for December utilities expense. Dec. 16 Sweet Homes pays $1,650 cash in employee salary for work performed in the latter part of December.

Answer 1