Research: Income Statement and Laser Recording Systems

Topics: Income statement, Generally Accepted Accounting Principles, Balance sheet Pages: 4 (1437 words) Published: February 24, 2013
(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 3.) CCC4 Cookie Creations is gearing up for the winter holiday season. During the month of December 2011, the following transactions occur. Continuing Cookie Chronicle 219

Dec. 1 5 8 9 15
19 23
23 23 28
Natalie hires an assistant at an hourly wage of $8 to help with cookie making and some administrative duties.
Natalie teaches the class that was booked on November 25. The balance out- standing is received. Cookie Creations receives a check for the amount due from the neighborhood school for the class given on November 30.
Cookie Creations receives $750 in advance from the local school board for five classes that the company will give during December and January. Pays the cell phone invoice outstanding at November 30.
Issues a check to Natalie’s brother for the amount owed for the design of the website.
Receives a deposit of $60 on a cookie class scheduled for early January. Additional revenue earned during the month for cookie-making classes amounts to $4,000. (Natalie has not had time to account for each class individually.) $3,000 in cash has been collected and $1,000 is still outstanding. (This is in ad- dition to the December 5 and December 9 transactions.)
Additional baking supplies purchased during the month for sugar, flour, and chocolate chips amount to $1,250 cash.
Issues a check to Natalie’s assistant for $800. Her assistant worked approxi- mately 100 hours from the time in which she was hired until December 23. Pays a dividend of $500 to the common shareholder (Natalie). As of December 31, Cookie Creations’ year-end, the following adjusting entry data are provided. 1. A count reveals that $45 of brochures and posters were used. 2. Depreciation is recorded on the baking equipment purchased in November. The bak- 
ing equipment has a useful life of 5 years. Assume that 2 months’ worth of depreci- 
ation is required. 3. Amortization (which is similar to...
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