Reference no: EM132891639

Question - It has been one month since you first open your business. Your parents are curious about your success and would like to know if your business has been profitable. You do not have an answer as you have not made any adjustments.

You gather the following information:

An inventory count reveals that $35 of supplies were used.

You estimate that all the baking equipment purchased ($1,200) will have a useful life of 5 years or 60 months. (you decided to record a full month's worth of depreciation, regardless of when the equipment was obtained for the business)

Your parents decide to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (assume that ½ of interest accrued in November).

On November 30, a friend asks you to host a party at her office for about 30 employees. You invoice for $250 and give it to her. She informs you that she will submit it for payment, and it will be paid at some point in December.

You receive a $50 cellphone bill (use the utilities expense account to record) for the usage by the business in November. The bill is due December 15.

Requirements -

1. Post adjusting journal entries for November.

2. Adjusted trial balance on November 30, 2020.

3. Prepare income statement, retained earnings statement and balance sheet.