$($Requirements $-$ Record all transactions, using either journal entries, the balance sheet equation, or any other method of your

choosing. I recommend using journal entries as we will use those throughout the course. You are not required to

submit your journal entries or balance sheet equation template.

After recording all the transactions, prepare the following financial statements

$1.$ A Balance Sheet for the year ending December $31,2022$

$2.$ An Income Statement for $12$ months ending December $31,2022$

$3.$ A Balance Sheet for the year ending December $31,2023$

$4.$ An Income Statement for $12$ months ending December $31,2022)$ Two recent University of Texas graduates, Emma and Jacob, have decided to start a business selling Longhorn coffee mugs. They name their firm Longhorn Coffee Co$.$ Emma, a chemistry major, heads up product design and Jacob handles market analysis. After conducting a survey of potential customers, the firm has decided to sell $16$ounce mugs for $$14,20-$ounce mugs for $$20,$ and $24-$ounce mugs $$25.$

For purposes of this assignment, ignore payroll taxes, sales taxes, and income taxes.

$2022$ Activities and Transactions

July $1,2022$: Longhorn Coffee Co$.($the firm$)$ is incorporated in Texas. Emma and Jacob contribute $$9$ per share for $5,000$ shares apiece, a total of $10,000$ shares and $$90,000$ contributed capital. None of the owners will be paid a salary.

July $1,2022$: Longhorn Coffee Co$.$ agrees to a month$-$to$-$month lease of a furnished office at a cost of $$500$ per month $($rent covers all utilities$).$ Longhorn Coffee Co$.$ prepays the first year of rent $($July $1,2022$ through June $30,2023)$ for $$6,000.$

September $1,2022$: The firm hires a part$-$time employee for $$12,000$ annually. The employee begins work on October $1,2022.$ The employee will be paid monthly in cash, on the last day of each month. The employee remains employed throughout $2023$ at the same salary.

November $17,2022$: The firm signs an agreement with a supplier who will manufacture mugs according the firm's specification. The supplier will charge as follows

$$6$ per $16-$ounce mug

$$8$ per $20-$ounce mug

$$12$ per $24-$ounce mug

The supplier requires Longhorn Coffee Co$.$ to pay cash upon delivery of the inventory until the firm establishes a credit history. Once the Longhorn Coffee Co$.$ develops a sufficient credit history the supplier will extend trade credit, allowing the firm to pay during a specified period after delivery.

December $1,2022$: Longhorn Coffee Co$.$ orders, receives, and pays for an initial order of $80016-$ounce mugs, $40020-$ounce mugs, and $20024-$ounce mugs. The firm has received no customer orders and has made no sales.

December $15,2022$: The Austin Tribune runs an article identifying Longhorn Coffee Company as one of the $10$ most promising startups in the state of Texas. The Austin Tribune is read by $100,000$ people across the state and normally it costs $$8,000$ to place an advertisement in the magazine. The company did not pay anything for this article. Instead, the editors of the magazine examined all recently incorporated firms in the state of Texas, and did their own analysis to identify the most promising firms.