Chicken Feet Mania Sol

Chicken Feet Mania Sol - Chicken Feet Mania CHICKEN FEET...

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1 E1: Buys equipment costing $95,000 and pays cash. E2: Pays rent for September and October on September 1. The total payment is CHICKEN FEET RESTAURANT had the following Accounting Events during its first month of operations: Chicken Feet Mania $10,000. E3: Buys inventory costing $40,000 and pays cash. E4: Receives $175,000 in cash for sales during September. E5: Pays wages of $20,000 incurred in September. The payment is in cash. E6: Pays an $8,000 dividend to Professor Mingyi. $7,000 of the dividend is in cash and $1,000 is offset against a note receivable owed to the company by Mingyi. E7a: Ending inventory is valued at $37,000. E7b: Depreciation expense for September is $1,000. 1 E7c: Receives September’s utility bill for $1,000 and will pay on October 15. E7d: Wages for the week ended September 30 are $4,000 and will be paid on October 6. E7e: Billed USC for a banquet costing $33,000 and will be paid on October 7. E7f: One month’s prepaid rent expired. The rent was prepaid on September 1 as shown above. Chicken Feet Mania z Chicken Feet Restaurant’s Chart of Accounts: ± C for cash ± AR for accounts receivable ± PPD for prepaid rent ± Inv for inventories ± NR for notes receivable ± E for equipment ± AcDep for accumulated depreciation ± AP for accounts payable ± ACC for accrued payables ± NP for notes payable ± CS for common stock ± APIC for additional paid-in capital ± RE for retained earnings ± SalesR for sales revenues 2 ± COGS for cost of goods sold ± UExp for utilities expense ± RExp for rent expense ± WExp for wage expense ± DExp for depreciation expense ± InSum for income summary account “Accounting Equation” Approach to Recording Transactions The asset accounts starting with cash. The permanent owners’ equity accounts, which are reported on the balance heet The temporary owners’ equity accounts such as revenues and expenses, which pertain to the income tatement The liabilities accounts, often starting with ccounts 3 sheet. statement. These accounts are called temporary accounts because they start and end each period with a zero balance. accounts payable to suppliers. Chicken Feet Mania =+ + C + AR + PPD + Inv + NR + E - AcDep = + AP + ACC + NP + CS + APIC + RE + SalesR - COGS - UExp - RExp - WExp - DExp + InSum Beginning Balance $72 $0 $0 $22 $1 $25 $0 $2 $0 $8 $82.5 $27.5 $0 $0 $0 $0 $0 $0 $0 $0 E1 Buys equipment E2 Pays rent E3 Buys inventory E4 Sales made E5 Pays wages E6 Pays dividend E7a Ending inventory Temporary Accounts Owners' Equity Assets Liabilities Permanent E7b Depreciation E7c Utility bil E7d Wages accrued E7e USC banquet E7f Rent expires Trial Balance C1 Close to IncSum C2 Close to RE Ending Balance R ccounts Receivable CC Accrued Payables AP: Accounts Payable C: Cash COGS: Cost of Goods Sold Exp Utilities Expense 4 AR : Accounts Receivable PPD: Prepaid Rent Inv: Inventory E: Equipment AcDep : Ac cumulated Dep reciation CS: Common Stock ACC: Accrued Payables NP: Notes Payable NR: Notes Receivable APIC: A dditional Paid-In Capital RE: Retained Earnings SalesR: Sales Revenues UExp: Utilities Expense RExp: Rent Expense WExp: Wage Expense DExp: Depreciation Expense InSum: Income Summary
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This note was uploaded on 06/23/2008 for the course ACCT 410x taught by Professor Bonner during the Spring '06 term at USC.

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Chicken Feet Mania Sol - Chicken Feet Mania CHICKEN FEET...

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