Assignment: Kaylee's Sweets
Kaylee James opened Kaylee's Sweets on January 1, 2016. The shop specializes in a selection of gourmet chocolate candies and a line of gourmet ice cream. You have been hired as manager. Your duties include maintaining the store's financial records. The following transactions occurred in January, the first month of operations.
o Received four shareholders' contributions totaling $30,200 cash to form the corporation; issued 400 shares of $0.10 par value common stock.
o Paid three months' rent for the store at $1,750 per month (two months are prepaid).
o Purchased and received candy for $5,000 on account, due in 60 days.
o Purchased supplies for $1,660 cash.
o Negotiated and signed a two-year $13,000 loan at the bank, receiving cash at the time.
o Used the money from (e) to purchase a computer for $3,750; used the balance for furniture and fixtures for the store.
o Placed a grand opening advertisement in the local paper for $500 cash; the ad ran in the current month.
o Made sales the first two weeks totaling $3,500; $2,675 was in cash and the rest on accounts receivable. The cost of the candy sold was $1,800.
o Made a $850 payment on accounts payable.
o Incurred and paid employee wages of $1,500.
o Collected accounts receivable of $600 from customers.
o Made a repair to one of the display cases for $700 cash.
o Made cash sales of $1,400 for the rest of the month. The cost of the candy sold was $500.
Required
o Record journal entries for each of the transactions.
o Prepare an income statement at the end of the first month of operations ended January 31.
o Prepare a balance sheet as of January 31.
o Write a memo to Kaylee offering your opinion on the results of operations during the first month of business.
o After three years in business the following data was computed. Based on this information provide a report to Kaylee on the performance of the store.
|
Year
|
2016
|
2017
|
2018
|
|
Total Assets
|
$52,500
|
$58,500
|
$66,000
|
|
Total Liabilities
|
18,500
|
22,000
|
27,500
|
|
Total Equity
|
34,000
|
36,500
|
38,500
|
|
Sales Revenue
|
55,000
|
82,500
|
93,500
|
|
Net Income
|
4,400
|
11,000
|
22,000
|
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.