Question

Question: CC4 It is the end of November and Natalie has been in touch with her grandmother. Her grandmother asked Natalie how well things went in her first month of business. Natalie, too, would like to know if her business has been profitable or not during November. Natalie realizes that in order to determine Cookie Creations' income, she must first make adjustments.

	Debit	Credit
Cash	340
A/R	300
Supplies	220
Prepaid Ins	1200
Equipment	1200
Website	600
A/P		650
Unearned Service Rev		60
Notes Payable		2000
Common Stock		800
Service Rev		400
Utilities Expense	50
Total	3910	3910

I have this information as well:

General Journal
Date	Description(Account Name)	Debit	Credit
Nov. 8	No journal entry required
Nov 8.	No journal entry required
Nov. 8	Cash	500
	Common Stock		500
Nov. 11	Supplies	95
	Cash		95
Nov. 14	Supplies	125
	Cash		125
Nov. 15	Equipment	300
	Common Stock		300
Nov. 16	Cash	2,000
	Notes Payable		2,000
Nov. 17	Equipment	900
	Cash		900
Nov. 18	No journal entry required
Nov. 25	Cash	60
	Unearned Service Revenue		60
Nov. 29	Cash	100
	Service Revenue		100
Nov. 30	Website	600
	Accounts Payable		600
Nov. 30	Prepaid Insurance	1,200
	Cash		1,200
Nov. 30	Accounts Receivable	300
	Servcie Revenue		300
Nov. 30	Utilities Expense	50
	Accounts Payable		50
	Total	6,230	6,230

a) Prepare journal entries to record the December transactions. I know there are no December JEs, that is what the question is asking for. Is it unanswerable?  

Answer 1

Computation of operational result of Natalie's business by preparing Income statement.
Income statement
For the month of November
	$
Service revenue	400
Less: Operational expenses;
Insurance ( $ 1,200/ 12 months )	-100
Utility expenses	-50
Net income	250
Balance sheet
	$	$
Assets;
Cash		340
Accounts Receivable		300
Supplies		220
Prepaid insurance ( $ 1,200 - $ 100)		1,100
Equipment		1,200
Website		600
Total assets		3,760
Liabilities;
Accounts Payable		650
Unearned Service Rev		60
Notes Payable		2,000
Total liabilities		2,710
Stockholder's equity;
Common stock		800
Retained earnings		250
Total stockholder's equity		1,050
Total liabilities and stockholder's equity		3,760
Notes;
1. Transaction details for the month of december is not available.
2 . It is assumed that the supplies are not consumed during the month of november and entire supplies are maintained as inventory.
3. It is also assumed that , prepaid insurance is for one year period starting from November 1 and one month insurance is expired.