Fundamentals of Financial Statements Simulation
ACC 529
University of Phoenix Online
Facilitator:
April 23, 2007
INTEROFFICE MEMORANDUM
TO: KEY DECISION-MAKER OF AUNT CONNIE'S COOKIES
FROM:
SUBJECT: NOVEMBER AND DECEMBER SUMMARY
DATE: 4/23/07
CC: JIM ANDERSON
Many of the transaction in the simulation affect more than one financial statement. Below identifies five accounting transactions and specific information that is conveyed to the manager.
1. Connie Rocha withdraws $80,000 from her personal account and invested in a new checking account (Aunt Connie's Cookies).
The transaction is recorded on the balance sheet under the accounting principle: Asset = Liabilities + Owners' Equity
Identify increase and decrease on specific transaction
In this accounting transaction $80,000 debit (own) to "Invested Cash" and credit (owe) to "Connie Rocha Capital."
Conveyed to manager that the company owe Connie $80,000 for her initial investment it in the company startup.
2. Purchase $20,000 worth of operation infrastructure (oven, etc., equipment)
The transaction is recorded on the balance sheet
Identify which chart of accounts are effected by the transaction (Asset under the Cash and Equipment ledger)
Balance Sheet: Debit asset (Equipment) increase by $20,000
Cash flow: Credit (decrease) of $20,000
Conveyed to manager that the firm purchased equipment worth $20,000 and paid cash for the procurement.
3. In second week of December Connie sold cookies worth $7,000 on credit to her club.
Balance sheet: Accounts Receivable (A/R) is debit (increase) by $7,000
Income Statement: Credit (increase) $7,0 ...