A) Prepare journal entries for all of the events that occurred during February 2001.

B) Prepare a statement of cash receipts and disbursements for February 2001.

Comparative Balance Sheets										Income Statement
As of the month ending				1/31/01		2/28/01		Change		For the month ending				28-Feb
Assets										Revenues
Cash				$                11,000		$               23,000		$       12,000		Sales Revenue				$    48,000
Accounts Receivable				7,600		17,000		9,400
Inventory				10,000		5,000		(5,000)		Total Revenue				$    48,000
Prepaid Rent				2,500		2,000		(500)
Property, Plant & Equipment				45,000		45,000		0		Expenses
	Accumulated Decreciation			(675)		(1,350)		(675)
	Total Assets			$                75,425		$               90,650		$       15,225		Cost of Goods Sold			$  21,000
										Operating Expense			9,880
										Decreciation Expense			675
Liabilities & Owners' Equity										Rent Expense			500
Advances from Customers				$                        800		$                            -		$             (800)		Interest Expense			445
Accounts Payable - Merchandise				5,100		4,000		(1,100)		Tax Expense			6200
Accounts Payable - Services				1,275		3,456		2,181
Interst Payable				450		445		(5)		Total Expense				$  (38,700)
Tax Payable				3,200		9,400		6,200
Current Portion - Long Term Debt				6,373		5,822		(551)		Net Income				$       9,300
Long Term Debt				38,627		38,627		0
Common Stock				13,000		13,000		0		Thought Questions:
Retained Earnings				6,600		15,900		9,300		1. For what accounting event would you debit (decrease) the account Advances from Customers (Deferred Revenue)? 2. What is the minimum amount that the Advances from Customers account could have been debited during the month of February 2001? 3. What is the maximum amount that the Advances from Customers account could have been debited during the month of February 2001?
	Total Liabilities & Owner's Equity			75,425		90,650		15,225
Notes to the Consolidated Financial Statements:
No common stock was issued during Feb 2001

Answer rating: 100% (QA)

SOLUTION Here are the journal entries and statement of cash receipts and disbursements for the month ... View the full answer