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Individual Case 1 Financial Accounting Tom loves cooking and after attending culinary school, he decided to start his own eatery in downtown Vancouver in May. Since he did not receive formal business,...

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Individual Case 1
Financial Accounting
Tom loves cooking and after attending culinary school, he decided to start his own
eatery in downtown Vancouver in May. Since he did not receive formal business, he
has asked you to help him prepare monthly financial statements. He was able to collect
all business receipt and financial records. The following are transactions for the month
of January 2022, the first month of operations.
Jan 1 Tom invested his saving of $350,000 into business bank account at TD Bank and
he also bo
owed &150,000 as 24 months bank loan.
Jan 1 Signed lease contract and secured the location
Jan 1 Purchased a one-year insurance policy for $24,000 in cash.
Jan 2 Tom purchased kitchen equipment for $150,000 and $1000 kitchen supplies
including napkins and clean supplies in cash
Jan 1 he hired a soul chef and one receptionist. In contract, he will pay the soul chef
$5,000 per month and receptionist $3,000 per month
Jan 2 Tom purchased $100,000 furniture in cash
Jan 3 Tom hired a renovation company to do lease improvement.
Jan 23 Tom completed his renovation and paid the renovation job $75,000 in cash
Jan 24 Tom purchased $30,000 ingredients as weekly inventories
Jan 24Tom had a grand open and generated $25,000 sales in cash and the cost of
goods sold for the day was $5,000
Jan 25 Tom generated $15,000 sales in cash and the cost of goods sold for the day
was $2,000
Jan 25 Tom launched a web campaign on Daily Hive, which costed him $5,000 and he
needed to pay the bill in 5 days.
Jan 26 Tom received weekend booking for corporate social event and the client made
prepaid $25,000
Jan 27 Over the end, Tom provided the service to his corporate client and the cost of
goods sold was $10,000
Jan 28, Tom made the payment to invoice from Daily Hive
Jan 29 Tom generated $10,000 sales and the cost of goods sold was $2,000
Jan 30th closed the business for day
Jan 31 Tom paid his soul chef and receptionist monthly salaries.
Jan 31 Tom also paid $3,000 dividend himself
Requirements:
a. Calculate ending balance for each account (25 marks)
. Prepare income statement, statement of changes in equity and balance sheet
(25 marks)
Answered Same DayMar 10, 2022

Solution

Bhavani answered on Mar 11 2022
50 Votes
Account ending balance
        Accounts ending balance
        Sales revenue = $25000 +$15000+$25000+$10,000= $75,000
        Cost of goods sold = $5000+$2000+$10,000+$2000 = $19,000
        Advertising expenses = $5000
        Salaries expenses =$5000 +$3000 = $8000
        Insurance expense = $24000 / 12 = $2000
        Cash = ( $350,000+$150,000 + $25,000+$15,000+$25,000+$10,000) -
         ($24,000+$150,000+$1000+$100,000+$75,000+$30,000+$5000+$8000 +$3000)
         =$179000
        Inventory = $30,000 - $19,000 =$11,000
        Kitchen Supplies = $1000
        Prepaid Insurance = $24000 -$2000=$22000
        Equipment= $150,000
        Furniture = $100,000
        Lease improvement = $75000
        Accounts payable = $5000-$5000 =0
        Unearned revenue = $25000-$25000 =0
        Loans payable = ...
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