Author Question: Eddie Bells started her own catering business called Delectable Edibles. Analyze each of the ... (Read 55 times)

hbsimmons88 · **on:** Jul 5, 2018

Eddie Bells started her own catering business called Delectable Edibles. Analyze each of the following transactions for the first month of business.

Prepare a complete set of financial statements for the month of March (Income Statement, Statement of Changes in Shareholders' Equity, Statement of Cash Flows and Balance Sheet). Eddie contributed 13,000 of her own money to start Delectable Edibles, which is organized as a corporation.
a. The business borrowed another 5,500 from her mother.
b. The business rented a kitchen for 1,500 for the month.
c. The business spent 1,260 on food, spices and other supplies.
d. The business hired Sue Saute as an assistant chef and paid her 500 for the month.
e. The business earned 7,940 in revenues during the month.

What will be an ideal response?

Question 2

Individual departments coordinate the organizational and IT strategic planning processes and reviews and approves the strategic IT plan.
Indicate whether the statement is true or false

at · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Delectible Edibles
Income Statement
For the Month Ended March 31, 2012

Revenues 7,940
Expenses
Rent 1,500
Supplies 1,200
Wages 500
Total expenses 3,260
Net income 4,680

Delectible Edibles
Statement of Changes in Shareholders' Equity
For the Month of March 31, 2012
Beginning contributed capital 0
Add: Common stock issued 13,000
Ending contributed capital 13,000
Beginning retained earnings 0
Add: Net income 4,680
Ending retained earnings 4,680
Total shareholder's equity 17,680

Delectible Edibles
Statement of Cash Flows
For the Month of March 31, 2012
Cash from operating activities
Cash collected from customers 7,940
Cash paid for rent (1,500)
Cash paid for supplies (1,260)
Cash paid for wages (500)
Total cash from operating activities 4,680
Cash for investing activities 0
Cash from financing activities
Contribution by owner 13,000
Proceeds from loan 5,500
Total cash from financing 18,500
Net increase in cash 23,180

Delectable Edibles
Balance Sheet
March 31, 2012
Assets Liabilities
Cash 23,180 Note Payable 5,500
Shareholders' equity
Common stock 13,000
Retained Earnings 4,680
_______ Total Sharheolders' equity 17,680
Total assets 23,180 Total liabilities and shareholders' equity 23,180

Answer to Question 2

F