6. Rick decides to start up an ice cream vending business in St. Louis, called Rick's...

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6. Rick decides to start up an ice cream vending business in St. Louis, called Rick's Ice Cream Dream (or "RICD"). The following events happen in June, 2023. (22.9 points) Date Event June 1 June 1 June 2 June 2 June 7 June 10 June 11 June 14 June 15 June 21 June 24 June 29 June 30 June 30 Rick incorporates "Rick's Ice Cream Dream" with 100 shares of $1 par value stock for which he contribute $5,000 (his life savings). The $5,000 is put into the newly opened "Rick's Ice Cream Dream" (RICD) bank account. RICD borrows $3,000 on short-term note from Merchants Bank at 10% interest. The full amount plus interest is due August 28, 2025. Rick pays $200 cash for 200 ice cream cones ($1 each) Rick pays $2,400 for old ice cream truck. The truck is expected to last 2 years and be depreciated via the straight-line method. Rick sells the entire inventory of ice cream, generating cash sales of $400. Rick fills up on gas for truck, pays $25 cash. Rick buys 400 more ice cream cones for $400 cash ($1 each) Rick sells entire ice cream inventory for $800 cash. Rick pays for insurance on truck for 6 months, $600. Rick buys 600 ice cream cones for $600 on account (full amount due on July 21). Rick sells 450 ice cream cones for $900 cash. Rick sells 100 ice cream cones for $200 to local school on account (school will pay full amount in 30 days). Rick fills up on gas for truck, $25 cash. Rick hires Dave Smith to drive ice-cream truck. Dave will be paid $15 per hour and start work on July 1. Rick expects to pay Dave about $500 per month. Requirement: Rick asks you to be his accountant and create monthly financial statements. As part of that work, on the next four pages you shall: 1. Prepare journal entries (see table on next page) for all transactions in June on the sheet attached. No explanation of the transactions are necessary. You may use account names similar to those that we used in our in class problems. 2. Prepare month end "adjusting entries" to reflect necessary accruals or adjustments to books. Note that RICD's estimated tax rate on income for the business is 20%. 3. Prepare an income statement for the month of June, 2023 (which reflects all adjusting entries). The income statement should be in "good form" - showing gross profit, operating income (EBIT), EBT, and net income. 4. Prepare a balance sheet as of June 30, 2023. 5. Prepare "closing entries" to close temporary income and expense accounts at the end of June. 6. Rick decides to start up an ice cream vending business in St. Louis, called Rick's Ice Cream Dream (or "RICD"). The following events happen in June, 2023. (22.9 points) Date Event June 1 June 1 June 2 June 2 June 7 June 10 June 11 June 14 June 15 June 21 June 24 June 29 June 30 June 30 Rick incorporates "Rick's Ice Cream Dream" with 100 shares of $1 par value stock for which he contribute $5,000 (his life savings). The $5,000 is put into the newly opened "Rick's Ice Cream Dream" (RICD) bank account. RICD borrows $3,000 on short-term note from Merchants Bank at 10% interest. The full amount plus interest is due August 28, 2025. Rick pays $200 cash for 200 ice cream cones ($1 each) Rick pays $2,400 for old ice cream truck. The truck is expected to last 2 years and be depreciated via the straight-line method. Rick sells the entire inventory of ice cream, generating cash sales of $400. Rick fills up on gas for truck, pays $25 cash. Rick buys 400 more ice cream cones for $400 cash ($1 each) Rick sells entire ice cream inventory for $800 cash. Rick pays for insurance on truck for 6 months, $600. Rick buys 600 ice cream cones for $600 on account (full amount due on July 21). Rick sells 450 ice cream cones for $900 cash. Rick sells 100 ice cream cones for $200 to local school on account (school will pay full amount in 30 days). Rick fills up on gas for truck, $25 cash. Rick hires Dave Smith to drive ice-cream truck. Dave will be paid $15 per hour and start work on July 1. Rick expects to pay Dave about $500 per month. Requirement: Rick asks you to be his accountant and create monthly financial statements. As part of that work, on the next four pages you shall: 1. Prepare journal entries (see table on next page) for all transactions in June on the sheet attached. No explanation of the transactions are necessary. You may use account names similar to those that we used in our in class problems. 2. Prepare month end "adjusting entries" to reflect necessary accruals or adjustments to books. Note that RICD's estimated tax rate on income for the business is 20%. 3. Prepare an income statement for the month of June, 2023 (which reflects all adjusting entries). The income statement should be in "good form" - showing gross profit, operating income (EBIT), EBT, and net income. 4. Prepare a balance sheet as of June 30, 2023. 5. Prepare "closing entries" to close temporary income and expense accounts at the end of June.