Kasvataan Cookie Company manufactures and sells various types of cookies to grocery chains as private label brands. The company reported the following balance sheet at the end of 2018:

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Case Assignment: Kasvataan Cookies
Kasvataan Cookie Company manufactures and sells various types of cookies to grocery chains as private label brands. The company reported the following balance sheet at the end of 2018:
AssetsLiabilities
Cash$5,000Accounts payable$3,000
Accounts Receivable2,000Other liabilities9,550
Inventories:Total current liabilities12,550
Raw materials$5,350
Work in process850
Finished goods9,55015,750
Prepaid Insurance600Equity
Equipment11,000Common stock10,600
Less acc depreciation3,5007,500Retained earnings7,700
Total Assets$30,850Total liabilities and equity$30,850
The following items summarize the business activities of the company during 2019:
1.Borrowed $10,000 on March 1, 2019, signing a 5 year, 6% note payable.
2.Made $4,500 of cash sales to customers.
3.Received a $150 invoice for an advertisement in the Cookie Times February 2020 issue.
4.Made $5,500 of sales on account.
5.Purchased on account flour for use in manufacturing the company’s signature cookies, $6,500.
6.Received $6,000 from customers on account.
7.Paid $800 for Directors and Officers liabiltiy insurance coverage for 2020.
8.Paid a cash dividend of $1,000 to shareholders.
9.Purchased equipment for $5,500 cash.
10.Paid trade vendors $2,500 of the balance due.
11.Paid $3,000 on direct manufacturing-related overhead (e.g. utilities, wages, and other operating costs of Kasvataan’s manufacturing plant). An additional $1,750 was spent on corporate salaries and other corporate expenses.
12.Paid $2,300 of other current liabilities.
Information for year-end adjusting entries is as follows:
a.A physical count of inventory at December 31, 2019 indicated a remaining balance of $5,000 in raw materials, $3,900 in work in process, and $12,550 in finished goods.
b.Depreciation on equipment, $600.
c.Insurance coverage purchased in 20018 expired in 2019.
d.Interest on the note is payable annually on March 1.
e.Income tax expense, $400, payable in June 2020.
Required:
1.Analyze and record the transactions to the general ledger and then post transaction to T-accounts.
2.Prepare the 2019 Income Statement and Balance Sheet.

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