question 2.It is now the end of May 2021. Your mother is curious to know if the business has been profitable and if you will need another loan to help finance the business. You would also like to know if you have been profitable during the first month of operation. In order to determine the business' income, you must first make some adjusting entries and you have put together the following additional information:1 The supplies were counted and costed out. There are $130 of office supplies remaining.2 On May 31, you delivered smoothies to John's Gym and, although you also delivered the invoice, you had forgotten to record it. The invoice was for $170 and is due in 30 days.
3 Because the above order was last-minute, you hired your friend for 4 hours on May 31 to help you make the smoothies. You will pay her on June 3 at an hourly rate of $16.
4 Depreciation on the juicing machine must be recorded. The useful life of the machine is 48 months. (Round depreciation amount to the nearest dollar)
5 The interest on the loan will be paid at the end of the loan term. Assume that 22 days interest has accrued on the loan by May 31 and the annual interest rate is 5%.

PART 3
INSTRUCTIONS:
a. Prepare the adjusting journal entries. Round all amounts to the nearest dollar. b. Post the entries to general ledger accounts.
c. Prepare an adjusted trial balance as at May 31, 2021.
d. Using the adjusted trial balance, prepare an income statement, statement of owner's equity, and balance sheet for the business' first month of operations.

Transcribed Image Text:

PART 2 INFORMATION: After researching the different forms of business organization, you (remember you Edith is now you and you are now Edith) decide to operate your business as a proprietorship. You then start the process of getting the business running. During the month of May 2021, a number of accounting type activities take place. PART 2 INSTRUCTIONS: During the month of May 2021, a number of accounting type activities take place. Now that you are familiar with accounting transactions and journal entries you: 1. Prepare the journal entries in the general journal to record the transactions 2. Post the entries to the general ledger accounts. 3. Prepare the trial balance as at May 31, 2021. May 1 7 9 You purchase a commercial juicing machine, that costs $940 using money from your own personal bank account. The machine will be used exclusively in your new smoothie business. You open up a business bank account and deposit $1000 from your personal bank account. Realizing your initial cash investment won't be enough, you borrow $3000 from your mom, depositing it into the business bank account. As part of the deal, you sign a one-year note payable in the name of the business. PART 2 INFORMATION: After researching the different forms of business organization, you (remember you Edith is now you and you are now Edith) decide to operate your business as a proprietorship. You then start the process of getting the business running. During the month of May 2021, a number of accounting type activities take place. PART 2 INSTRUCTIONS: During the month of May 2021, a number of accounting type activities take place. Now that you are familiar with accounting transactions and journal entries you: 1. Prepare the journal entries in the general journal to record the transactions 2. Post the entries to the general ledger accounts. 3. Prepare the trial balance as at May 31, 2021. May 1 7 9 You purchase a commercial juicing machine, that costs $940 using money from your own personal bank account. The machine will be used exclusively in your new smoothie business. You open up a business bank account and deposit $1000 from your personal bank account. Realizing your initial cash investment won't be enough, you borrow $3000 from your mom, depositing it into the business bank account. As part of the deal, you sign a one-year note payable in the name of the business.

Answer rating: 100% (QA)

Date Accounts 31May21 Supplies expenses Supplies 31May2... View the full answer