Milo is starting a small business. He will be selling coffee that he roasts and packages. He gives you source documents for the following transactions and asks you to create a set of financial statements from these source documents for him. Because this is a new business, there are no beginning balances.
As his accountant, your first step is to do the following:
- Prepare the 10 transactions below by posting to the general journal. You should use an Excel spreadsheet to accomplish this task. Use ACCT201_IP2_Journal_Ledger_Workbook_Template to complete your assignment. When you are finished, save your completed template and submit your assignment following the Individual Project assignment directions below.
- Review the Chart of Accounts here.
- Review this model assignment before beginning this assignment: ACCT201_IP2_Journal_Ledger_Example.
- Invested $100,000 cash in the business
- Paid $125 cash for phone service
- Purchased $45,000 equipment with a bank loan
- Paid $3,500 cash for rent
- Paid $6,000 cash for insurance
- Purchased $2,500 of advertising on credit (Note: This is an expense to the company)
- One of his customers, Cup of Joe, purchased $2,500 of coffee on account
- Customer, Cup of Joe, paid $1,000 on their account
- Milo paid in full for the advertising he purchased on credit in transaction #6
- Sold coffee to another customer, Grandma’s Bakery, for $6,000 and received cash