Question

Six Requirements:

1. Prepare the journal entries and post to the T-accounts.
2. Prepare the adjusting entries and post to the T-accounts.
3. Prepare an adjusted trial balance.
4. Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings and dollar signs.
5. Prepare the closing entries.
6. Calculate the following measurements: Working Capital, Current Ratio, Profitability rate/percentage, Net Income Percentage. Comment with two to three sentences on how your business is performing after one month of operations.

You opened a new pet supplies store and named it Ozzie’s Pet Supply and Boarding on December 1, 2019. The following information about December’s transactions, accounts, and adjustment data is available.

Transactions:
Dec. 1 Family members contributed $50,000 cash to the business in exchange for capital.

Dec. 2 Purchased $10,800 of equipment for the store paying cash.

Dec. 3 Paid $4,500 for a 9-month insurance policy starting on December 1.

Dec. 4 Paid $18,000 cash to purchase land to be used in operations.

Dec. 5 Purchased office supplies on account, $3,000.

Dec. 6 Borrowed $28,000 from the bank for business use. You signed a bank payable note for an interest rate of 5% APR.

Dec. 7Paid $800 for advertising expenses.

Dec. 8 Purchased inventory (dog food) for the store at a cost of $1,500

Dec. 9 Paid for office supplies $3,000

Dec 10 Received a bill for utilities to be paid in January, $200.

Dec 31 Service Revenues earned during the month included $18,500 cash and $2,000 on account.

Dec. 31 Sold one hundred percent of the dog food purchased on Dec. 8^th for $2,100 in cash.

Dec. 31 Paid employees' salaries $2,000 and building rent $800.

Dec. 31 Dividends of $200 were paid.

Dec. 31 Customer prepaid $1,000 for boarding services in January.

Answer 1

Prepare journal entries as follows:

Date	Account Titles and Explanation	Debit	Credit
Dec. 01	Cash	$50,000
	owner, capital		$50,000
Dec. 02	Equipment	$10,800
	Cash		$10,800
Dec. 03	Prepaid Insurance	$4,500
	Cash		$4,500
Dec. 04	Land	$18,000
	Cash		$18,000
Dec. 05	Office supplies	$3,000
	Accounts payable		$3,000
Dec. 06	Cash	$28,000
	Note payable		$28,000
Dec. 07	Advertising Expense	$800
	Cash		$800
Dec. 08	Inventory	$1,500
	Cash		$1,500
Dec. 09	Office supplies	$3,000
	Cash		$3,000
Dec. 10	Utilities Expense	$200
	Utility payable		$200
Dec. 31	Cash	$18,500
	Accounts Receivable	$2,000
	Service revenue		$20,500
Dec. 31	Cash	$2,100
	Sales		$2,100
	COGS	$1,500
	Inventory		$1,500
Dec. 31	Dividend	$200
	Cash		$200
Dec. 31	Cash	$1,000
	Unearned Service Revenue		$1,000

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Post the above entries in T-accounts:

______________________________________________________________

Prepare Unadjusted Trial Balance as follows:

Unadjusted Trial Balance
Cash	$59,500
Accounts Receivable	$2,000
Office supplies	$6,000
Prepaid insurance	$4,500
land	$18,000
Equipment	$10,800
Accounts payable		$4,500
Utilities payable		$200
Unearned service revenue		$1,000
Note payable		$28,000
Owners capital		$50,000
Dividend	$200
Sales		$2,100
Service revenue		$20,500
COGS	$1,500
Salaries Expense	$2,000
Rent Expense	$800
Utilities Expense	$200
Advertising Expense	$800
	$106,300	$106,300