$mbmb,$DunnRite Training

Statement of Changes in StockholYou will be preparing financial statements for February $29,2024.$ Project Details

As you know, you were called in to help Nicole Dunn, who recently started a personal

training business called DunnRite Training, Inc. Nicole began operations on January $1,2024,$

and had limited activity in her first month. Please assist her with her financial records for February $2024.$

NOTES:

Use the information provided. DunnRite Training has adopted the allowance method of accounting for uncollectible accounts effective immediately. The company estimates that $3\%$ of its accounts receivable

balance will be uncollectable.

Economic Events

February $1.$ Nicole sold one$-$half of the training equipment purchased in January for cash.

The sale resulted in a profit of $$300.$ Hint: determine the book value of the equipment sold

and then determine the selling price. Profit $=$ selling price $$ book value.

February $1.$ Nicole obtained a line of credit with Commerce Bank for $$25,000.$ The interest

rate on the line of credit is $9\%.$ Payments of interest and $5\%$ of outstanding balance are due

on the last day of each month.

February $2.$ Nicole obtained $$8,000$ from the line of credit established on February $1.$

February $1.$ Nicole purchased a van for $$42,000$ plus $6\%$ sales tax by paying $$10,000$ cash

and issuing a $60$ month installment note for the balance. The monthly payment on the note

is $$667.$ Nicole estimates the van to have a $6-$year useful life and a salvage value of

$$15,000.$

February $2.$ Nicole hired a part$-$time assistant to begin working on February $15.$ The

assistant is paid $$2,000$ per month on the $15$th day of the month with the first payment due

on March $15.$

February $9.$ DunnRite Training purchased $$3,000$ in office supplies on account.

February $10.$ DunnRite Training paid for the inventory purchased on January $10.$

February $14.$ DunnRite purchased $100$ logoed tank tops for $$9$ per tank and $75$ logoed t$-$

shirts for $$10$ per t$-$shirt. This inventory was purchased on account with payment due in $30$ days.

February $15.$ DunnRite Training received $$9,000$ cash for training services February $1$ to February $14.$

February $17.$ DunnRite Training performed $$3,000$ of training services on account. Payment is due in $30$ days.

February $17.$ DunnRite Training received payment in full for all training services performed on account in January.

February $19.$ Lynne Lulu, one of Nicole$$s clients, filed a lawsuit against DunnRite Training for $$75,000.$ The lawsuit alleges that Nicole did not take proper precautions during a training session. While Ms$.$ Lulu did not receive any physical injuries, she claims that the lack of care resulted in emotional distress that prevents her from training. Nicole consulted an attorney which stated that the likelihood of any payment to Ms$.$ Lulu is remote.

February $20.$ DunnRite Training completed $$2,000$ training for Champions Scholastic Programs on account. Payment is due in $30$ days.

February $25.$ DunnRite Training paid $$3,500$ in dividends.

February $29.$ DunnRite Training received $$8,000$ cash for training services to be performed from March $1$ to March $31.$

February $29.$ DunnRite sold $105$ tanks during the month of February for $$20$ per tank and $67$ t$-$shirts at $$25$ per t$-$shirt. All customers paid cash at the time of purchase.

February $29.$ Nicole completed an inventory of supplies and determined that $$800$ was on hand.

February $29.$ Nicole made the first payment on the installment note issued on February $1.$

February $29.$ Nicole made the minimum payment due on the line of credit with Commerce Bank.

Assignment

The starting point for this assignment is the midterm project solution. In addition, the economic events in January should be considered when preparing the February financial statements $($e$.$g$.,$ depreciation$).$

Review the transactions and add any accounts that will be needed to the chart of accounts for DunnRite Training, Inc. $($see midterm solution for chart of accounts established in January$).$ The chart of accounts should list the name of the account, the type of account $($e$.$g$.,$ asset, liability, revenue, etc.$),$ and where the account will appear $($e$.$g$.,$ balance sheet, income statement, etc.$)$ Include all accounts needed for the monthly transactions and for the month$-$end adjustments.

$1.$ Record the transactions using the horizontal balance sheet method used throughout the course.

$$ Set up an Excel spreadsheet with all the accounts identified in part $1$ of this assignment listed in the spreadsheet's columns. Accounts should appear in the following order:

$$ Assets, Liabilities, Equity, Revenue, Expense, Record each transaction in the rows under the account name.

$$ The last two columns should be for the statement of cash flows. Indicate the amount of the change in cash $(+,-)$ and the type of cash flow $($e$.$g$.,$ Investing, Financing, Operating$)$

$$ Record any necessary adjusting entries in the spreadsheet.

$$ Determine the ending balance in each account by summing each column.

$2.$ Prepare comparative financial statements $($include J