Jenny's Froyo, INC.

General Journal
Year 2013
Serial No Particulars P/R Debit
1 Cash $100,000
Common stock

2 Cash $190,000
Sales

3 Inventory $72,000
Account Payable

4 Loss on inventory Write-of $2,000

Inventory

3B Account Payable $47,000

Cash
Explanation:
2013
Accounts Payable
Opeing Balane Nil
Purchases 72000
Closing Balance 25000
Cash Paid 47000
5 Property, Plants and Equipments $25,000
Property, Plants and Equipments $2,000
Property, Plants and Equipments $4,000
Cash
(Debit what comes in credit what goes out)

6(b) Allowance for Depriciation $500

Cash $1,300
Loss on Disosal of PPE $200
Property, Plants and Equipments
8(a) Advertising Expense $3,000
Cash

8(b) Prepaid Business License $1,800

Cash

8(C) Business License expense $900

Prepaid Business License
8(D) Rent Expense $24,000
Cash
8(E) Salary Expense(48000+12000) $60,000
Cash
Salary Payable

8 (F) Utilities Expense $3,600

Cash

9 Depriciation Expense $5,000

Allowance for Depriciation
(Depriciation on Model FZ-1000 $25000/5 Years)
10 Depriciation Expense $500
Allowance for Depriciation
(Depriciation on new fridge 4000/4years * 6/12 months)
10 Depriciation Expense $500
Allowance for Depriciation
(Depriciation on the fridge sold)
11 Income Tax expense $7,575
Accrued Taxes

12 Cost of goods sold $60,000

Inventory

Year 2014
1 Cash $295,500
Bank Charges(150000 sales *3%) $4,500
Sales

2 Marketable Securities (3 years) $30,000

Cash

3 Rent Expense $36,000

Cash
(2000 per month +$1000 per month)* 12 months
4 (a) Purchase $120,000
Account Payable

4(b) Account Payable $116,000

Cash

5 COGS $115,000
Inventory

6 Salary Payable $5,000

Tax Payable $7,575
Cash
7 Advertising Expense $6,000
Salary Expense $62,000
Utilities Expense $5,000
Cash

8 Dividend $12,500
Cash

9 Tax Expense $16,600

Accrued Taxes

10 Depriciation Expense $6,000

Allowance for Depriciation

11 Interest Income $1,800

Income Recievable

12 Business License Expense $900

Prepaid Business License
Credit

$100,000

$190,000

$72,000

$2,000

$47,000

$31,000

$2,000

$3,000

$1,800

$900
$24,000
 $55,000
$5,000

$3,600

$5,000

$500

$500

$7,575

$60,000

$300,000

$30,000

$36,000

$120,000

$116,000

$115,000
$12,575
$73,000

$12,500

$16,600

$6,000

$1,800

$900
 Balance Sheet
Cash $ 141,325 Account Payables $ 29,000
Inventory $ 15,000 Tax Payable $ 16,600 $ 45,600
Income Recievable $ 1,800 Common Stock $ 100,000
Marketable Securities $ 30,000 Retained Earnings $ 72,525
Plant Property and Equipment $ 17,500 Dividend $ 12,500 $ 60,025
$ 205,625 $ 205,625
 INCOME STATEMENT

Sales $ 300,000
COGS $ 115,000
Gross Profit $ 185,000
Bank Charges $ 4,500
Advertising $ 6,000
Salaries $ 62,000
Utilities $ 5,000
Rent expenses $ 36,000
Dep. Expense $ 6,000 3000
Business License $ 900 $ 120,400 900
Income Before Interest $ 64,600 6000
Interest Income $ 1,800 24000 Opening In
Income before taxes $ 66,400 60000 Purchases
Taxes $ 16,600 3600 Cloaing inv
Net Income $ 49,800 97500 COGS
ROA 24%
Cash 69%
Return on owners equity 49.80%
Debt to equity Ratio 76%
Acid Ratio 3.10
 10000
120000
-15000
115000
 Balance sheet
Assets
Cash $ 141,325
Marketable securitites $ 30,000
Inventories $ 15,000
Accrued Interest $ 1,800
Total current assets $ 188,125

Property Plant and equipment(net) $ 17,500

Total Assets $ 205,625

Liabilities:
Accounts payable $ 29,000
Accrued Taxes $ 16,600
Total Liabilities $ 45,600

Equtiy
Common stock $ 100,000
Retained earnings $ 60,025
Total liabilities & Equity $ 205,625
 Income Statement
Sales $ 300,000
COGS $ 115,000
Gross Profit $ 185,000
Rent Expense $ 36,000
Bank Charges $ 4,500
Advertising Expense $ 6,000
Salary Expense $ 62,000
Utilities Expense $ 5,000
Depriciation Expense $ 6,000
Business License Expense $ 900
Operating Income $ 64,600
Add:Interest Income $ 1,800
Income Before Tax $ 66,400
Tax expense(66400*25%) $ 16,600
Net Income $ 49,800

Notes:
1) Opening Inventory 10000
Purchases 120000
Cloaing invetory -15000
COGS 115000

2) Income Tax rate 25%

(7575/30300)

3) Payment To Accounts Payable

Opening Balance 25000
Add:Purchases 120000
Less:Closing Balance -29000
Cash Payment 116000

4) Since refigerator bought (FZ-1000) IS A LONG TERM

asset is generally shown at book value
so a decrease in market value does not afect book prices

5) Dividends of $12500 are deducted from

retained earnings
Corrections:

2)
Entry is correct
Accounting rule:Debit all expenses and credit all incomes
so
Cash 290000
Sales 290000

is the correct entry

6)
2013
Accounts Payable
Opeing BalNil
Purchases 72000
Closing Ba 25000
Cash Paid 47000