In: Accounting
You start a cookie business and this is what you do in your first month (all of the below occurs during month 1):
You invest $30 in your cookie business
You get a $30 loan from your parents.
You go to the grocery store to buy flour and butter. Your ingredients can make 80 cookies. Your total cost is $40. You pay $20 in cash and $20 is charged to your account at the grocery store.
Your mom makes a batch of cookies for 40 glasses and charges $2 in labor (cash).
You sell the 40 cookies at $1 each. You receive cash for 20 cookies and the other 20 cookies are purchased on account.
You repay $15 of the loan.
Your parents want $2 in interest (cash).
The fleetmarket where you sells your cookies charges to buy an insurance policy. The insurance agent offers you a ten-week policy for the summer which costs $10 payable in advance (you have to pay for the entire policy in cash now, but you only expense one week in this accounting period).
You purchase a convection oven for $25. You also buy a tiny patch of land from a friend’s family for $5. You pay for the convection oven and the land with cash. You depreciate the convection over $2/week.
A customer pays $5 for cookies bought on account
Prepare your balance sheet, Income statement and cash flows