Meyer Company was started on November 1^st of the current year, by owner, Annie Meyer. The company is a sole proprietorship that sells a special line of handmade greeting cards to local stores.

Additional information:

Meyer prepares financial statements on a monthly basis and her fiscal year-end is December 31.

Meyer will prepare closing entries at year-end ONLY.

Meyer Company uses the FIFO perpetual inventory system.

Meyer makes all credit sales on terms of 2/10, n/30.

Meyer records monthly depreciation on all assets using the straight-line method.

Meyer calculates interest based on a 365-day year.

Meyer uses the following accounts:

101 Cash 1

102 Accounts Receivable

103 Allowance for Uncollectible Accounts

105 Inventory Thank You

106 Inventory Birthday

107 Interest Receivable

108 Supplies

110 Prepaid Insurance

120 Prepaid Rent

130 Notes Receivable, Short-term

140 Computers & Furniture

141 Accumulated Depreciation Computers & Furniture

150 Van

151 Accumulated Depreciation -- Van

200 Accounts Payable

203 Interest Payable

220 Notes Payable, Long-term

300 Meyer, Capital

310 Meyer, Withdrawals

400 Sales Revenue

401 Sales Returns and Allowances

402 Sales Discounts

405 Interest Revenue

500 Cost of Goods Sold

506 Rent Expense

507 Depreciation Expense

508 Insurance Expense

509 Utilities Expense

510 Supplies Expense

512 Interest Expense

513 Bad Debt Expense

600 Income Summary

During the months of November and December, Meyer Company completed the transactions on the following pages.

NOVEMBER

Annie Meyer borrowed $75,000 from a local organization that finances the start-up of small businesses. Meyer signed a long-term Note Payable with an 8% annual interest rate due in 5 years, and Meyer deposited this money in the company checking account. Meyer Company is required to repay the note and interest upon maturity.

Meyer paid rent for November, December, and January on her small office. The rent for all three months was $3,000 ($1,000 each month).

Meyer paid insurance for November and December of $400 ($200 each month).

Meyer purchased a van for deliveries. The cost of the van was $30,000, its useful life is 5 years, and it will have a salvage value of $1,500 at the end of the 5 years.

Meyer purchased a computer for $1,200 (5-year useful life, no salvage value) and office furniture for $2,000 (5-year useful life, $400 salvage value).

Meyer purchased the following inventory from Cards Etc. on credit terms 2/10, n/30:

Inventory Item Cost per item Quantity Purchased

Thank You $0.30 5000

Birthday $0.80 3000

Sold inventory on account to Tidbits:

Inventory Item Sales Price per item Quantity Sold

Thank You $3.00 2000

Birthday $3.50 500

Received from Tidbits a merchandise return for 30 of the Thank You cards.

Sold inventory on account to a novelty shop that just opened called Thingsville:

Inventory Item Sales Price per item Quantity Sold

Thank You $3.00 400

Birthday $3.50 400

Purchased inventory on credit terms of 2/10, n/30 from Greetings!:

Inventory Item Cost per item Quantity Purchased

Thank You $0.40 2000

Sold inventory for cash to a local company:

Inventory Item Sales Price per item Quantity Sold

Thank You $3.00 3000

Purchased supplies for cash of $100.

Paid utilities of $350.

Prepare month-end adjusting entries for rent, insurance, interest expense, and depreciation for the month of November. Also, $30 worth of supplies was on hand at the end of the month.

Required:

1. Journalize and post the required journal entries for November.

2. Prepare Meyer Companys Income Statement and Statement of Owners Equity for November. Prepare the Balance Sheet as of November 30.