Problem 4-2 Bobcat Betty's Fudge Sandwich Business Year 2019. It was January 1, 2019 and Bobcat Betty had $24,000 and decided she wanted to become rich. She decided to operate as a corporation so she filed the necessary papers with the State, put the money in the bank under the company name and issued 240 shares of common stock to herself. On January 1 she paid $1,500 to rent a cart for one year. During the year she bought 24,000 fudge sandwiches for $1.00 each. She paid $20,000 cash for the sandwiches and owed $4,000 at the end of the year. She sold 20,000 sandwiches at $2.00 each. In addition she paid salaries of $8,500 and parking fees of $1,300. At the end of the year, in addition to what she owed for sandwiches, she owed $500 in parking fees. To secure her parking spot, Bobcat Betty had put down a $500 security deposit at the beginning of the year. Bobcat Betty's kept some of her cash in an interest- bearing account and the bank paid her $200 in interest income during the year. Bobcat Betty issued an additional 60 shares of common stock on March 1ª for $6,000. The tax rate is 40% and taxes are to be paid on March 15th of the following year. Record all transactions, post to Taccounts and prepare financial statements.
Problem 4-2 Bobcat Betty's Fudge Sandwich Business Year 2019. It was January 1, 2019 and Bobcat Betty had $24,000 and decided she wanted to become rich. She decided to operate as a corporation so she filed the necessary papers with the State, put the money in the bank under the company name and issued 240 shares of common stock to herself. On January 1 she paid $1,500 to rent a cart for one year. During the year she bought 24,000 fudge sandwiches for $1.00 each. She paid $20,000 cash for the sandwiches and owed $4,000 at the end of the year. She sold 20,000 sandwiches at $2.00 each. In addition she paid salaries of $8,500 and parking fees of $1,300. At the end of the year, in addition to what she owed for sandwiches, she owed $500 in parking fees. To secure her parking spot, Bobcat Betty had put down a $500 security deposit at the beginning of the year. Bobcat Betty's kept some of her cash in an interest- bearing account and the bank paid her $200 in interest income during the year. Bobcat Betty issued an additional 60 shares of common stock on March 1ª for $6,000. The tax rate is 40% and taxes are to be paid on March 15th of the following year. Record all transactions, post to Taccounts and prepare financial statements.
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 33P
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Transcribed Image Text:Problem 4-218
Bobcat Betty's Fudge Sandwich Business Year 2019. It was January 1, 2019 and Bobcat
Betty had $24,000 and decided she wanted to become rich. She decided to operate as a
corporation so she filed the necessary papers with the State, put the money in the bank under
the company name and issued 240 shares of common stock to herself. On January 1 she paid
$1,500 to rent a cart for one year. During the year she bought 24,000 fudge sandwiches for
$1.00 each. She paid $20,000 cash for the sandwiches and owed $4,000 at the end of the year.
She sold 20,000 sandwiches at $2.00 each. In addition she paid salaries of $8,500 and parking
fees of $1,300. At the end of the year, in addition to what she owed for sandwiches, she owed
$500 in parking fees. To secure her parking spot, Bobcat Betty had put down a $500 security
deposit at the beginning of the year. Bobcat Betty's kept some of her cash in an interest-
bearing account and the bank paid her $200 in interest income during the year. Bobcat Betty
issued an additional 60 shares of common stock on March 1st for $6,000. The tax rate is 40%
and taxes are to be paid on March 15th of the following year. Record all transactions, post to
T accounts and prepare financial statements.
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