Reference no: EM133103210
Question - Miss Odette opened a souvenir store called "The Souverinette" on November 1, 2021. She uses the perpetual inventory system. The following were the transactions during the period:
November 1: Provided P50,000 cash as initial investment to the business.
Acquired equipment for P36,000 cash.
The equipment has a useful life of 4 years.
Paid a one-year insurance premium of P12,000. (Use asset method.)
November 12: Purchased inventory costing P15,000 for cash.
November 14: Sold goods for P15,000 cash. The cost of sales is P2,000.
December 1: Sold goods with sales price of P12,000 in exchange for a P12,000, 10%, one-year note receivable. Principal and interest are due at maturity. The cost of sales is P1,500.
December 5: Purchased inventory for P2,000 on account.
December 26: Sold goods for P17,000 on account. The cost of sales is P3,000.
December 27: Paid P1,000 account payable.
December 29: Collected P10,000 account receivable.
Additional information:
The following information was identified on December 31, 2021:
a) Of the total accounts receivable, P1,000 is doubtful of collection.
b) Salaries earned by employees during the period but were not yet paid amounted to P10,000.
Required -
1. Prepare the balance sheet and income statement of The Souvenirette as of and for the two months ended December 31, 2021, respectively. Note: The two statements should be prepared based on the post-closing trial balance.
2. Prepare a statement of changes in owners' equity.