Question

Cookie Creations is gearing up for the winter holiday season. During the month of December 2014, the following transactions occur.

Dec. 1		Natalie hires an assistant at an hourly wage of $8 to help with cookie making and some administrative duties.
5		Natalie teaches the class that was booked on November 25. The balance outstanding is received.
8		Cookie Creations receives a check for the amount due from the neighborhood school for the class given on November 30.
9		Cookie Creations receives $750 in advance from the local school board for five classes that the company will give during December and January.
15		Pays the cell phone invoice outstanding at November 30.
16		Issues a check to Natalie’s brother for the amount owed for the design of the website.
19		Receives a deposit of $60 on a cookie class scheduled for early January.
23		Additional revenue during the month for cookie-making classes amounts to $4,000. (Natalie has not had time to account for each class individually.) $3,000 in cash has been collected and $1,000 is still outstanding. (This is in addition to the December 5 and December 9 transactions.)
23		Additional baking supplies purchased during the month for sugar, flour, and chocolate chips amount to $1,250 cash.
23		Issues a check to Natalie’s assistant for $800. Her assistant worked approximately 100 hours from the time in which she was hired until December 23.
28		Pays a dividend of $500 to the common shareholder (Natalie).

As of December 31, Cookie Creations’ year-end, the following adjusting entry data are provided.

1.		A count reveals that $45 of brochures and posters were used.
2.		Depreciation is recorded on the baking equipment purchased in November. The baking equipment has a useful life of 5 years. Assume that 2 months’ worth of depreciation is required.
3.		Amortization (which is similar to depreciation) is recorded on the website. (Credit the Website account directly for the amount of the amortization.) The website is amortized over a useful life of 2 years and was available for use on December 1.
4.		Interest on the note payable is accrued. (Assume that 1.5 months of interest accrued during November and December. Interest rate is 9%.) Round to nearest dollar.
5.		One month’s worth of insurance has expired.
6.		Natalie is unexpectedly telephoned on December 28 to give a cookie class at the neighborhood community center on December 31. In early January, Cookie Creations sends an invoice for $450 to the community center.
7.		A count reveals that $1,025 of baking supplies were used.
8.		A cell phone invoice is received for $75. The invoice is for services provided during the month of December and is due on January 15.
9.		Because the cookie-making class occurred unexpectedly on December 28 and is for such a large group of children, Natalie’s assistant helps out. Her assistant worked 7 hours at a rate of $8 per hour.
10.		An analysis of the Unearned Service Revenue account reveals that two of the five classes paid for by the local school board on December 9 still have not been taught by the end of December. The $60 deposit received on December 19 for another class also remains unearned.

Cash
Nov. 8	500	Nov. 11	95
Nov. 16	2,000	Nov. 14	125
Nov. 25	60	Nov. 17	900
Nov. 29	100	Nov. 30	1,200
Nov.30 Bal.	340

Accounts Receivable
Nov. 30	300
Nov. 30 Bal.	300

Supplies
Nov. 11	95
Nov. 11	125
Nov. 30 Bal.	220

Prepaid Insurance
Nov. 30	1,200
Nov. 30 Bal.	1,200

Equipment
Nov. 15	300
Nov. 17	900
Nov. 30 Bal.	1,200

Website
Nov. 30	600
Nov. 30 Bal.	600

Accounts Payable
		Nov. 30	600
		Nov. 30	50
		Nov. 30 Bal.	650

Unearned Service Revenue
		Nov. 25	60
		Nov. 30 Bal.	60

Notes Payable
		Nov. 16	2,000
		Nov. 30 Bal.	2,000

Common Stock
		Nov. 8	500
		Nov. 15	300
		Nov. 30 Bal.	800

Service Revenue
		Nov. 29	100
		Nov. 30	300
		Nov. 30 Bal.	400

Utilities Expense
Nov. 30	50
Nov. 30 Bal.	50

Post adjusting entries for the month of December.

Answer 1

Particulars	Debit	Credit
Dr. Miscellaneous Expenses - Posters and Brouchers		45
Cr. Bank			45
(Being usage of Posters and Brouchers for marketing purposes)
Dr. Depreciation [=(1200/5)*2/12]		40
Cr. Accumulated Depreciation / Equipment			40
(Depreciation of Equipment recorded)
Dr. Amortization		25
Cr Website			25
(Amortization of webiste recorded)
Dr. Interest		7.3125
Cr. Interest Payable			7.3125
(Interest on N/P accrued)
Dr. Insurance		100
Cr Prepaid Insurance			100
(Expiry of 1 month's prepaid insurance)
Dr. Income from class		450
Cr. Accrued Income			450
(Being Income form classes accrued)
Dr. Cost of Goods Sold		1025
Cr. Inventory			1025
(Being Supplies used)
Dr. Telephone Expenses		75
Cr. Outstanding expenses			75
(Bring expenses due)
Dr. Wages		56
Cr. Wages Oustanding			56
(Being Wages due)
Dr. Income (60*2/5)+60		84
Cr. Unearned Income			84
(Income accrued)