Oilmaggedon was another success for Rhy's Fries but not without some significant challenges. The event showcased...

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Oilmaggedon was another success for Rhy's Fries but not without some significant challenges. The event showcased how popular Ronald's product was as he brought in $26,775 (including GST of $1,275) in cash receipts but it could have been higher. He sold 3,850 servings of food but underestimated how far his inventory would go and ran out of potatoes part way through the last day. He had 5 pails of oil left and $30 worth of amenities at the end of the 5th day. He also needed to hire a temporary helper to handle the demanding preparation and cleanup work. The assistant worked 5 hours a day for each of the 5 days. The employee was hired through a local hiring agency at a rate of $20 per hour and the total wages for the employee are due to the hiring agency 15 days after the end of the event. Travelling to and from the event cost $400 in fuel and 5 nights of hotel at $120 per night (plus GST). The biggest challenge was with his food truck however. Being unfamiliar with the equipment proved to be a costly error. After the first day Ronald left some of his equipment running overnight causing it to overheat and breakdown. The mistake resulted in $1,800 worth of repairs. He paid for the repairs using the cash generated from the first day of the sales. Since he had no product left to sell for part of the last day, he took some time to check out what offerings the other vendors had. He noticed a several things during his wandering. One was that his selling price seemed to be lower than many other competitors and also most vendors offered several different products and product variations rather than just the single option offered at Rhy's Fries. He wondered if it would have perhaps been more profitable to sell fewer servings but at a higher price? Having now rested and recovered, Ronald took the cash generated from the event and repaid the short term operating loan, the loan from Bob and made the first installment payment on the food truck loan. He also took his food truck to a local mechanic to get some routine maintenance completed so that he can avoid any unnecessary repairs at future events. The maintenance costs were $2,500 plus GST and were completed and paid with cash on June 30. 4.) Complete any journal entries required up to June 30, 20X1 including any adjusting entries needed. Assume a full month of insurance, interest, and depreciation for the food truck. Oilmaggedon was another success for Rhy's Fries but not without some significant challenges. The event showcased how popular Ronald's product was as he brought in $26,775 (including GST of $1,275) in cash receipts but it could have been higher. He sold 3,850 servings of food but underestimated how far his inventory would go and ran out of potatoes part way through the last day. He had 5 pails of oil left and $30 worth of amenities at the end of the 5th day. He also needed to hire a temporary helper to handle the demanding preparation and cleanup work. The assistant worked 5 hours a day for each of the 5 days. The employee was hired through a local hiring agency at a rate of $20 per hour and the total wages for the employee are due to the hiring agency 15 days after the end of the event. Travelling to and from the event cost $400 in fuel and 5 nights of hotel at $120 per night (plus GST). The biggest challenge was with his food truck however. Being unfamiliar with the equipment proved to be a costly error. After the first day Ronald left some of his equipment running overnight causing it to overheat and breakdown. The mistake resulted in $1,800 worth of repairs. He paid for the repairs using the cash generated from the first day of the sales. Since he had no product left to sell for part of the last day, he took some time to check out what offerings the other vendors had. He noticed a several things during his wandering. One was that his selling price seemed to be lower than many other competitors and also most vendors offered several different products and product variations rather than just the single option offered at Rhy's Fries. He wondered if it would have perhaps been more profitable to sell fewer servings but at a higher price? Having now rested and recovered, Ronald took the cash generated from the event and repaid the short term operating loan, the loan from Bob and made the first installment payment on the food truck loan. He also took his food truck to a local mechanic to get some routine maintenance completed so that he can avoid any unnecessary repairs at future events. The maintenance costs were $2,500 plus GST and were completed and paid with cash on June 30. 4.) Complete any journal entries required up to June 30, 20X1 including any adjusting entries needed. Assume a full month of insurance, interest, and depreciation for the food truck.

Answer rating: 100% (QA)

Journal Entries for Rhys Fries as of June 30 20X1 June 15 Sales Revenue Debit Cash 25500 26775 1275 Credit Sales Revenue 25500 Cost of Goods Sold Debi... View the full answer