Accounting Question

First NameMidterm-Accounting
Last Name
Spring 2024
Transactions
You started “Cooks For You” this past August. The main revenue stream for your firm is providing
cooking prep kits for those who want to learn to cook but are intimidated by going grocery shopping by
themselves. You have not yet hired an accountant, so you are now faced with regarding all of the
transactions for the first month of operations.
1. Your first raised some initial start-up funds by selling stock to your parents. You were able to
raise $300,000 from this stock sale.
2. You were also able to bribe a high-ranking officer a local community bank into providing you a
$600,000 loan at 18% interest.
3. To start operations, you had to purchase delivery trucks. In total you purchased 3 trucks at a total
cost of $240,000. You expect these trucks to last on average for 5 years before needing
replacement and do not expect be able to sell them at the end of their life (no salvage value).
4. In additional to the trucks purchased, you had to purchase some other supplies totaling $18,000.
This purchase was made on credit and won’t be due for 45 days.
5. At the beginning of the month, you also paid rent of $8,000 with cash.
6. In the first month, you had $32,000 in prep kits ordered on credit. You hope most of these credit
sales will generate a cash inflow by the end of the month.
7. During the month, you used up $6,000 worth of supplies to make the meal prep kits that were
ordered.
8. It is now the end of the month and you just paid yourself a monthly salary of $4,000 a month.
This was paid with cash.
9. At the end of the month, you have collected $15,000 of the $32,000 of credit sales that were made
during the month.
10. At the end of the month, you also paid your business’s monthly utilities of $2,000. This was paid
with cash.
11. A final cash payment was made at the end of the month to cover the interest owed on the bank
loan that you received earlier this month.
12. Finally, to maintain proper accounting records, you recorded one month of depreciation on the
ovens.
First Name
Last Name
Midterm-Accounting
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#
1
A=
cash
L
+E
2k
300k
cash 600K NIP
240K
3 PPE
600K
18k A P
18K
2
cash
4
300k
240k
inventory
5
cash
8k
8
8k
6
AIR
32K
sales
32K
6K
COGS
6K
82
4K
e p
2K
7
8
9
inventory
cash
EYE ISE
10
cash
11
cash
12
4K
p
2K
Itp
deepp