Question

Margaret decided to open Craft Leather on 1 September 20XX. She contributed her leatherwork tools to the business valued at $2,000 and deposited $15 000 cash in a business bank account. The tools have a useful life of five years with no residual value.
Margaret uses a periodic inventory system.

Transactions up to 30 November 20XX are as follows:

Sept 1 Prepaid three months of rent $1800.
6 Ordered 32 square metres of leather at $120 per square metre and $160 worth of fittings to be paid on delivery.
6 Received the loan of $40,000 from her parents.
7 Organised a website and paid an annual fee $500 (note: do not treat as a prepayment).
10 Purchased the leather work equipment for $40,000 using cash.
27 Received and paid for the leather and fittings ordered 6 September.

Oct 13 Ordered another 32 metres of leather at $120 per metre and $160 worth of fittings on credit, to be paid on delivery.
15 Purchased advertising brochures for stall and Art Centre shop $220.
25 Paid EFTPOS account fee, $40.
30 Received and paid for the leather and fittings ordered 13 October.
30 During the month produced 160 handbags, using 32 metres of leather and $160 worth of fittings. (hint: decrease the leather material and leather supplies and increase inventory).

Nov 6 First market stall day was very successful - sold 35 bags for $2,100 for cash.
6 Paid market stall fee $100.
13 Ordered another 32 metres of leather at $120 per metre and $160 worth of fittings.
13 Second market stall day - sold 30 bags for $1,800.
13 Paid market stall fee $100.
18 Received payment from Arts Centre shop, 10 handbags sold for $600 commission paid.
18 Received order online for one handbag.
20 Market stall day sold 44 bags for $2,640.
20 Paid market stall fees $100.
21 Completed the ordered handbag and received $80, paid $20 postage for order.
25 Paid EFTPOS account fee $40.
27 Market stall day sold 40 bags for $2,400.
27 Paid market stall fees $100.
28 Received and paid for the leather and fittings ordered 13 November.
30 During the month produced 160 handbags, using 32 metres of leather and $160 worth of fittings.

Your Team is required to:
Margaret has requested that you prepare a worksheet, Income Statement and Balance Sheet for the first three months of operation so that she can assess the business.
She has asked that you record the depreciation expense for the equipment for the three months to the end of November. She has also asked that you calculate and record the interest on the loan accrued to date.
Margaret is using a periodic inventory for the handbags, leather supplies and fittings. At the end of each month, she records the handbags in inventory and reduces the balance of the leather and fittings accounts accordingly. Margaret has $4,000 worth of handbags on hand at the end of November.

Margaret requests that you prepare the following:
a. worksheet for the transactions for the quarter September through to November,
b. an Income Statement for the quarter September – November, and
c. Balance Sheet as at the end of November 20XX.

Answer 1

Answer:

THE ANSWER IS IDK

Explanation: