1. MPB has been in business for many months already. From 1/1/2011 to 1/31/2011, the following occurred:

MPB purchased $10,000 in bakery inventory and paid cash to the suppliers.

MPB sold $15,000 in cupcakes to customers on account (cash payment not expected for a few months); cost of suppliers used is $5,000

MPB recorded bakery equipment depreciation expense of $1,000

2. CMB has been in business for many months already. From 1/1-1/31/2011, the following occurred:

CMB purchased $10,000 in bakery inventory on account to suppliers.

CMB sold $15,000 in cupcakes to customers for cash; cost of suppliers used is $5,000

CMB recorded bakery equipment depreciation expense of $1,000

Required:

a. For each event, provide the required journal entries to record the event.

b. Prepare the income statements for MPB and CMB from 1/1/2011 to 1/31/2011.

c. Using the indirect method to calculate the cash flows from operations starting from net incomes for MPB and CMB. 

Answer rating: 100% (QA)

a Journal Entry for MPB 112011 Bakery Inventory 10000 Cash 10000 1312011 Accounts Receivable 15... View the full answer