Bobcat Betty's Fudge Sandwich Business, Year 1 - 20X1. It was January 1, 20X1 and Bobcat...

  

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Bobcat Betty's Fudge Sandwich Business, Year 1 - 20X1. It was January 1, 20X1 and Bobcat Betty had $24,000 and decided she wanted to become rich. She decided to operate as a corporation so she filed the necessary papers with the State, put the money in the bank under the company name and issued 240 shares of common stock to herself. On January 1 she paid $2,000 to rent a cart for one year. During the year she bought 22,000 fudge sandwiches for $1.00 each. She paid $20,000 cash for the sandwiches and owed $2,000 at the end of the year. She sold 18,000 sandwiches at $2.00 each. In addition she paid salaries of $8,500 and parking fees of $900. At the end of the year, in addition to what she owed for sandwiches, she owed $500 in parking fees. To secure her parking spot, Bobcat Betty had put down a $500 security deposit at the beginning of the year. Bobcat Betty's kept some of her cash in an interest- bearing account and the bank paid her $200 in interest income during the year. Bobcat Betty issued an additional 60 shares of common stock on March 1st for $6,000. The tax rate is 40% and taxes are to be paid on March 15th of the following year. Record all transactions, post to T accounts and prepare financial statements. Bought 30,000 sandwiches at $1.00 each on account (on credit). Paid the beginning Accounts Payable. She also paid $23,000 on this years' purchases. She sold 32,000 sandwiches at $2 each. She paid wages of $12,000 plus she owed her workers $1,000 at the end of the year. On January 1 she purchased the cart she had been renting for $12,000 cash. She estimated the cart would last 12 years and then be worthless. She paid parking fees of $2,450 ($150 per month plus last year's accrual, plus Jan 20X3). Business has been so good that Betty decided to expand. She got a loan from her parents (interest free) of $16,000. She then purchased a second cart for $14,000 on January 1st that she expects will last for ten years and then be worth$1,000. Betty also sold another 100 shares of stock for $5,000 on October 1st to provide additional working capital. Taxes for the prior year were paid and taxes for the current year will be paid next year (same rate as last year). Prepare financial statements. Bobcat Betty's Fudge Sandwich Business, Year 1 - 20X1. It was January 1, 20X1 and Bobcat Betty had $24,000 and decided she wanted to become rich. She decided to operate as a corporation so she filed the necessary papers with the State, put the money in the bank under the company name and issued 240 shares of common stock to herself. On January 1 she paid $2,000 to rent a cart for one year. During the year she bought 22,000 fudge sandwiches for $1.00 each. She paid $20,000 cash for the sandwiches and owed $2,000 at the end of the year. She sold 18,000 sandwiches at $2.00 each. In addition she paid salaries of $8,500 and parking fees of $900. At the end of the year, in addition to what she owed for sandwiches, she owed $500 in parking fees. To secure her parking spot, Bobcat Betty had put down a $500 security deposit at the beginning of the year. Bobcat Betty's kept some of her cash in an interest- bearing account and the bank paid her $200 in interest income during the year. Bobcat Betty issued an additional 60 shares of common stock on March 1st for $6,000. The tax rate is 40% and taxes are to be paid on March 15th of the following year. Record all transactions, post to T accounts and prepare financial statements. Bought 30,000 sandwiches at $1.00 each on account (on credit). Paid the beginning Accounts Payable. She also paid $23,000 on this years' purchases. She sold 32,000 sandwiches at $2 each. She paid wages of $12,000 plus she owed her workers $1,000 at the end of the year. On January 1 she purchased the cart she had been renting for $12,000 cash. She estimated the cart would last 12 years and then be worthless. She paid parking fees of $2,450 ($150 per month plus last year's accrual, plus Jan 20X3). Business has been so good that Betty decided to expand. She got a loan from her parents (interest free) of $16,000. She then purchased a second cart for $14,000 on January 1st that she expects will last for ten years and then be worth$1,000. Betty also sold another 100 shares of stock for $5,000 on October 1st to provide additional working capital. Taxes for the prior year were paid and taxes for the current year will be paid next year (same rate as last year). Prepare financial statements.

Answer rating: 100% (QA)

First lets record all the transactions in a journal Jan 1 Cash 24000 Common Stock 24000 Jan 1 Rent Expense 2000 Cash 2000 Throughout the year Sandwich... View the full answer