Reference no: EM133611497

Question: Youka Roots is a business specializing in the production and sale of innovative utensil-friendly roots that enhance the dining experience. These roots are designed to be used alongside utensils, providing a unique and sustainable alternative to traditional table settings. The business operates in Florida and targets college campuses to introduce its products to a young and environmentally conscious consumer base.

Business Transactions:

1. Initial Investment: Invest $50,000 in the business, debiting Cash and crediting Capital.
2. Purchase Raw Materials: Buy raw materials (roots) for $10,000 on credit.
3. Production Costs: Incur $5,000 in production costs, paying in cash.
4. Manufacturing Equipment Purchase: Acquire manufacturing equipment for $15,000, financing through a loan.
5. Production and Packaging: Spend $7,000 on production and packaging, paying with a credit card.
6. Sales to College Cafeteria: Sell $12,000 worth of Youka Roots to a college cafeteria on credit.
7. Cash Sales at Campus Events: Generate $8,000 in revenue from cash sales at various college events.
8. Utilities Payment: Pay $1,000 in utility bills for the production facility.
9. Loan Repayment: Repay $3,000 of the manufacturing equipment loan.
10. Employee Salaries: Pay $4,000 in salaries to employees.
11. Marketing Expenses: Spend $2,500 on marketing initiatives to promote Youka Roots.
12. Inventory Purchase: Purchase additional raw materials (roots) for $8,000 in cash.
13. Online Sales: Make online sales of $6,000 through the company website, receiving payments through digital platforms.
14. Rent Payment: Pay $2,500 in rent for the production facility.
15. Returned Merchandise: Process returns of $500 from unsatisfied customers.
16. Tax Payment: Settle $1,200 in business taxes.
17. Bulk Purchase Discount: Receive a $1,000 discount on a bulk purchase of packaging materials.
18. Partnership with Local Farmers: Establish a partnership with local farmers, paying them $3,000 for a regular supply of roots.
19. Discounts to College Clubs: Offer $800 worth of Youka Roots at a discount to various college clubs.
20. Insurance Payment: Pay $1,500 for business insurance coverage.
21. Repair Equipment: Spend $500 to repair manufacturing equipment.
22. Customer Loyalty Program: Implement a customer loyalty program, giving away $300 worth of Youka Roots as rewards.
23. Interest Payment: Pay $500 in interest on the manufacturing equipment loan.
24. Employee Training: Invest $2,000 in employee training programs.
25. Bulk Sale to Retailer: Sell $15,000 worth of Youka Roots in bulk to a local retailer on credit.

Accounting Cycle:

1. Record transactions in T-accounts.
2. Transfer ending T-account balances to the Trial Balance.
3. Generate the Income Statement and Balance Sheet from the Trial Balance.