Question

ACCT 2300 Principles of Financial Accounting Excel Financial Statement Project Business Activities During June 2023 the following activities occurred: 6/1/2023 Sophie borrowed $80,000 with 6% interest from HomeStreet Bank to start her business. 6/1/2023 Sophie contacted 4 friends, each of which contributed $25,000 to her business venture. 6/2/2023 Sophie purchased a food truck, including a cash register, retrofitted for her specific business costing $75,000. Sophie wants to classify the long-term asset as Equipment in her books. 6/2/2023 $600 was paid in advance for 1 year of insurance. 6/3/2023 Purchased supplies costing $500 from Best Buy, paying $100 cash and putting the rest on account. 6/4/2023 Paid $90 for a newspaper advertisement that was also printed on 6/4. 6/5/2023 In preparation for all upcoming events, Sophie purchased $16,000 of inventory (food, promotional cups with logo, etc.). 6/8/2023 Sophie's first event was for Seattle University. She earned $2,500 all from cash sales. $1,100 of inventory was used. When Sophie counted the cash at the end of the day only $2,490 was in the register. 6/9/2023 One of Sophie's employees noticed that a cooler was left open during the night and $675 of inventory was spoiled (i.e., obsolete). 6/10/2023 Paid cash for half of office supplies purchased on credit earlier in the month. 6/11/2023 Sophie's second event was for a community charity event in which she did not charge for any of her drinks. Sales would have been $2,000. $700 of inventory was still used for the cause. 6/12/2023 Sophie worked an event for the Seattle Mariners for $8,000 with a promise to pay and terms of 2/10, n/30. COGS totaled $3,000. 6/13/2023 Sophie contracted with the Chieftain and sold $1,000 of drinks costing $400. The Chieftain didn't pay that night, but agreed to terms with Sophie of 2/10, n/30 before closing up. 6/14/2023 Purchased additional inventory for $4,000 on account. 6/15/2023 Sophie's employee sold 2 gift cards for $150 each. No beverages were sold at this time. 6/16/2023 Returned $300 of groceries from the 6/14 transaction. Sophie accidentally bought bananas not plantains (and the store accepted the return b/c of the simple mistake). 6/17/2023 Sophie and her employee canvased the Freemont Solstice Parade and sold $400 worth of promotional cups (inventory) with Sophie's logo on them for $500 all on account. No sales discounts were offered but all customers promised to pay by 7/15/23. 6/18/2023 A couple of customers from 6/17/23 returned $40 worth of cups. Sophie accepted the return and waived the $50 owed. 6/21/2023 The Mariners paid for the event that occurred earlier in the month. 6/24/2023 The Chieftain paid Sophie for the event that occurred earlier in the month. 6/27/2023 Amazon paid Sophie $10,000 in advance for mocktails to be made for an event at the Spheres on 7/7/23. 6/28/2023 Sophie purchased a $1,500 credit card machine (equipment) with cash to boost sales at upcoming events. All future credit card sales will incur a 3% transaction fee. 6/29/2023 Sophie was asked to cater for a Seattle Storm event. She earned $4,500 all from credit card sales. $2,700 of inventory was used. 6/30/2023 Paid wages to employees for June totaling $1,250. 6/30/2023 Sophie paid a dividend of $100 each to her four investor friends ($400 total). The following data are available for adjusting entries at the end of April 2023: 6/30/2023 Record insurance expense for June. 6/30/2023 Record interest expense for June on the bank loan. 6/30/2023 Records show customers used $200 of gift cards to purchase drinks costing $75 to make. 6/30/2023 Sophie's business had a water (utility) bill of $750 unpaid at end of the month. 6/30/2023 Record total depreciation on the truck, register, and credit card machine of $500. 6/30/2023 Sophie's employee counted all remaining supplies. $25 remained ready for use. 6/30/2023 Sophie calculated (but did not pay yet) tax expense of $600. When recording these activities, only use account titles discussed in class and used in your homework (i.e., do not create new account names).

Answer 1

The accounting profit for the firm is $50,000, which is calculated by subtracting the explicit costs from the total revenues.

Accounting profit, also referred to as financial profit or bookkeeping profit, is a company's net income, or total revenue minus explicit costs. Accounting profit is used to assess a company's performance and compare its financial.

The accounting profit for the firm is calculated by subtracting the explicit costs from the total revenues. In this case, the total revenues are $1 million, and the explicit costs are the labor cost of $600,000, the capital cost of $150,000, and the materials cost of $200,000.

Therefore, the accounting profit for the firm is $1 million - ($600,000 + $150,000 + $200,000) = $50,000.