1. You opened a new pet supplies store and named it Ozzie’s Pet Supply and Boarding on December 1, 2019. The following information about December’s transactions, accounts, and adjustment data is available.

Transactions:
Dec. 1 Family members contributed $50,000 cash to the business in exchange for capital.

Dec. 2 Purchased $10,800 of equipment for the store paying cash.

Dec. 3 Paid $4,500 for a 9-month insurance policy starting on December 1.

Dec. 4 Paid $18,000 cash to purchase land to be used in operations.

Dec. 5 Purchased office supplies on account, $3,000.

Dec. 6 Borrowed $28,000 from the bank for business use. You signed a bank payable note for an interest rate of 5% APR.

Dec. 7Paid $800 for advertising expenses.

Dec. 8 Purchased inventory (dog food) for the store at a cost of $1,500

Dec. 9 Paid for office supplies $3,000

Dec 10 Received a bill for utilities to be paid in January, $200.

Dec 31 Service Revenues earned during the month included $18,500 cash and $2,000 on account.

Dec. 31 Sold one hundred percent of the dog food purchased on Dec. 8^th for $2,100 in cash.

Dec. 31 Paid employees' salaries $2,000 and building rent $800.

Dec. 31 Dividends of $200 were paid.

Dec. 31 Customer prepaid $1,000 for boarding services in January.

Accounts

Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated Depreciation-Equipment; Land; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Bank Notes Payable; Family, Capital; Service Revenue; Dog Food Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense-Equipment; Inventory; COGS; Dividends; Service Charge-Bank; Uncollectible Accounts Expense; Allowance for Doubtful Accounts.

Adjustment Data

1. Office Supplies used during the month, $600.
2. Depreciation on the Equipment for the month should be calculated based on straight-line depreciation and useful life of 4 years (zero residual).
3. One month of insurance has expired.
4. Calculate accrued interest expense and make adjusting entries.
5. The service charge from the bank totaled $25.
6. Sales Method for reserving for doubtful accounts was executed (Remember, only A/R balances are considered).
7. 
   
8. Prepare the journal entries and post them to the T-accounts.
9. Prepare the adjusting entries and post to the T-accounts.
10. Prepare an adjusted trial balance.
11. Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings and dollar signs.
12. Prepare the closing entries.
13. Calculate the following measurements: Working Capital, Current Ratio, Profitability rate/percentage, Net Income Percentage. Comment with two to three sentences on how your business is performing after one month of operations.

Answer rating: 100% (QA)

Journal Entries Dec 1 Family members contributed 50000 cash to the business in exchange for capital Dr Family Capital 50000 Cr Cash 50000 Dec 2 Purchased 10800 of equipment for the store paying cash D... View the full answer