Master

Kitchen Inc.

Master Kitchen Inc. opened its first branch in October 2013. During its opening
month, the owners, Christine Possey and Gordon Perez, recorded each and every
transaction in detail to make sure that they wouldn’t get their financial
statements wrong. The transactions during the opening month are as follows.

October 1 – Christine Possey and Gordon Perez initially invested Php 500,000
and Php 300,000, respectively, in their business, Master Kitchen Inc.

October 2 – The owners purchased a brand new car worth Php 1,500,000 to be
used for delivery. In paying for the delivery, they loaned from the bank HALF of
the payment. Both owners will invest the half, so technically, each owner will be
paying ¼ of the cost of the car.

October 3 – The owners purchased all the necessary supplies for the business.
They paid Php 800 in cash.

October 4 – The ingredients and the packaging arrived today. They paid a total of
Php 20,000. Since they only had Php 15,000 cash on hand, the remaining will be
paid on a later date within the month.

October 5 – Their products, which are mainly desserts, cost Php 150, while the
production costs of each product amounts to Php 80. To make sure that the
business doesn’t run out of stocks, they purchased additional inventory worth
Php 5,000.

October 6 - The business started its operations.

October 7 – The company was able to sell 40 desserts today.

October 8 – The company started accepting credit card as a mode of payment
today. Because of this, they had more customers. They were able to sell 30
products paid in cash, and 20 more on credit.

October 9 – Just for today, the business organized a sales promotion. All products
are sold at 10% off if they paid in cash. Because of this, they had more customers
today, and were able to sell 60 desserts, all paid in cash.

October 10 – They were running out of supplies, so the company purchased Php
1,500 worth of supplies in Shoppersville.

October 11 – The business was able to sell Php 2,240 worth of inventory.

October 12 – Christine invested an additional oven and ice cream machine. She
paid a total of Php 70,000.

October 13 – The company received its water and electricity bills today. They
paid for both immediately. They paid a total of Php 7,500. The water bill’s total
amount was Php 700.

October 14 – They paid for their liabilities for the packaging and inventory today.

October 15 – They were able to sell Php 4,500 worth of products. Aside from this,
all the customers who owed them money also paid for their debts.

1. Prepare the company’s journal entries for October.
2. Prepare Master Kitchen Inc.’s T-Accounts.
3. Construct Master Kitchen Inc.’s Trial Balance.