- Term Papers and Free Essays

Aunt Connies Cookies

Essay by   •  December 22, 2010  •  397 Words (2 Pages)  •  1,157 Views

Essay Preview: Aunt Connies Cookies

Report this essay
Page 1 of 2

Per our previous discussion, the following is a summary of the November 1986 transactions that occurred during the initial start up of Aunt Connie's Cookie Company.

1. Initially the company purchased oven and kitchen equipment for $20,000. This is listed under the assets category of the November Balance sheet. The money in your cash account was also decreased by $20,000 as a result of this purchase.

2. In addition, in November office equipment was purchased on account from Trevor Depot for $15,000. The equipment listed under assets on the balance sheet increased by $15,000 bringing the equipment assets to 35,000. The company will owe $15,000 as shown under accounts payable until the equipment is paid for.

3. A cash payment of 15,000 was spent to obtain baking ingredients needed to fulfill orders. This transaction increases the company's property and is shown as an asset to the company. However, the cash account is reduced by that same amount.

4. Later in November, the company issued a check for $3,000, towards its debt to Trevor Depot for previously purchased office equipment. This transaction decreased the company's cash by $3,000 and reduced the company's debt as reflected in Accounts Payable by $3000, leaving a cash balance of $42,000 and an Account Payable Balance of $12,000. The company owed this debt at that point in time.

5. The owners of the office premises requested the company pay rent in advance. A check was issued for $6,000. This amount was deducted from the cash account leaving a balance of $36,000 in cash as reflected on the balance sheet and is recorded as prepaid rent increasing the company's assets. Brining the Assets to $92,000.

It is my understanding the company is interested in expanding and will be seeking a bank loan. Although you have firm orders of $100,000 worth of cookies, this transaction cannot be reflected



Download as:   txt (2.4 Kb)   pdf (54.2 Kb)   docx (9.2 Kb)  
Continue for 1 more page »
Only available on
Citation Generator

(2010, 12). Aunt Connies Cookies. Retrieved 12, 2010, from

"Aunt Connies Cookies" 12 2010. 2010. 12 2010 <>.

"Aunt Connies Cookies.", 12 2010. Web. 12 2010. <>.

"Aunt Connies Cookies." 12, 2010. Accessed 12, 2010.