<p>Continuing Cookie Chronicle – Chapter 3</p><p>(a)</p><p>GENERAL JOURNAL J2 Date Account Titles and Explanation Debit Credit Nov. 30 Advertising Supplies Expense ($95 – $75) 20 Advertising Supplies 20</p><p>30 Baking Supplies Expense 25 Baking Supplies 25</p><p>30 Depreciation Expense—Baking Equipment 20 Accumulated Depreciation— Baking Equipment ($1,200 ÷ 60) 20</p><p>30 Interest Expense ($2,000 X .06 X .5/12) 5 Interest Payable 5</p><p>30 Accounts Receivable 250 Teaching Revenue 250</p><p>30 Telephone Expense 50 Accounts Payable 50</p><p>Cash Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  305</p><p>Accounts Receivable Date Explanation Ref. Debit Credit Balance Nov. 30 J2 250 250</p><p>Advertising Supplies Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  95 30 J2 20 75 Baking Supplies Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  125 30 J2 25 100</p><p>Prepaid Insurance Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  1,200</p><p>Baking Equipment Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  1,200</p><p>Accumulated Depreciation—Baking Equipment Date Explanation Ref. Debit Credit Balance Nov. 30  20 20</p><p>Website Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  600</p><p>Accounts Payable Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  600 30 J2 50 650</p><p>Interest Payable Date Explanation Ref. Debit Credit Balance Nov. 30 J2 5 5</p><p>Unearned Revenue Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  25 Notes Payable Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  2,000</p><p>Common Stock Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  800</p><p>Teaching Revenue Date Explanation Ref. Debit Credit Balance Nov. 30 Balance  100 30 J2 250 350</p><p>Telephone Expense Date Explanation Ref. Debit Credit Balance Nov. 30 J2 50 50</p><p>Advertising Supplies Expense Date Explanation Ref. Debit Credit Balance Nov. 30 J2 20 20</p><p>Baking Supplies Expense Date Explanation Ref. Debit Credit Balance Nov. 30 J2 25 25</p><p>Depreciation Expense—Baking Equipment Date Explanation Ref. Debit Credit Balance Nov. 30 J2 20 20</p><p>Interest Expense Date Explanation Ref. Debit Credit Balance Nov. 30 J2 5 5 (b) COOKIE CREATIONS Adjusted Trial Balance November 30, 2005</p><p>Debit Credit Cash...... $ 305 Accounts Receivable...... 250 Advertising Supplies...... 75 Baking Supplies...... 100 Prepaid Insurance...... 1,200 Baking Equipment...... 1,200 Accumulated Depreciation—Baking Equipment...... $ 20 Website...... 600 Accounts Payable...... 650 Interest Payable...... 5 Unearned Revenue...... 25 Note Payable...... 2,000 Common Stock...... 800 Teaching Revenue...... 350 Telephone Expense...... 50 Advertising Supplies Expense...... 20 Baking Supplies Expense...... 25 Depreciation Expense—Baking Equipment...... 20 Interest Expense...... 5 0,000 Totals...... $3,850 $3,850 (c) COOKIE CREATIONS Income Statement Month Ended November 30, 2005</p><p>Revenues Teaching revenue...... $350 Expenses Telephone expense...... $50 Baking supplies expense...... 25 Advertising supplies expense...... 20 Depreciation expense...... 20 Interest expense...... 5 120 Net income...... $230</p><p>COOKIE CREATIONS Retained Earnings Statement For the Month Ended November 30, 2005</p><p>Retained earnings, November 1...... $ 0 Add: Net income...... 230 Deduct: Dividends Declared...... 0 Retained earnings, November 30...... $230</p><p>COOKIE CREATIONS Balance Sheet November 30, 2005</p><p>Assets Cash...... $ 305 Accounts receivable...... 250 Advertising supplies...... 75 Banking supplies...... 100 Prepaid insurance...... 1,200 Website...... 600 Baking equipment...... $1,200 Less: Accumulated depreciation—baking equipment...... 20 1,180 Total assets...... $3,710</p><p>Liabilities and Stockholders’ Equity</p><p>Liabilities Notes payable...... $2,000 Accounts payable...... 650 Interest payable...... 5 Unearned revenue...... 25 Total liabilities...... 2,680</p><p>Stockholders’ equity Common stock...... $800 Retained earnings...... 230 1,030 Total liabilities and stockholders’ equity...... $3,710</p>