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Wursthaus, Inc. completed its sixth month of business, October:

Wursthaus, Inc. Balance Sheet October 31
Cash	$5,594	Accounts Payable	$4,500
Accounts Receivable, Net of $435 Allowance		Wages Payable	500
for Doubtful Accounts	8,265	Notes Payable	3,926
Inventory	675
Prepaid Insurance	450	Common Stock	1,000
Equipment, net of $50 Accumulated Depreciation	2,350	Retained Earnings	7,408
Total Assets	$17,334	Total Liabilities and Shareholders' Equity	$17,334

Chart of Accounts
Accounts Payable		Dividends		Paid-in Capital in Excess of Par
Accounts Receivable		Dividends Payable		Prepaid Insurance
Accumulated Depreciation		Doubtful Accounts Expense		Retained Earnings
Allowance for Doubtful Accounts		Equipment		Sales Revenue
Cash		Insurance Expense		Treasury Stock
Common Stock		Interest Expense		Wages Expense
Cost of Goods Sold		Inventory		Wages Payable
Depreciation Expense		Notes Payable

The journal and ledger show the continuation of Wursthaus seventh month of business, November.

DATE	ACCOUNT TITLES AND EXPLANATIONS	DEBIT	CREDIT
Nov. 1
	1) Paid $4,500 for purchases made on account.
Nov. 1
	2) Purchased on account 1,500 sausages for $3.50 each, FOB Destination.
Nov. 1
	3) Paid $500 of wages owed from October.
Nov. 1
	4) Issued 5,000 shares of $1 par value common stock at a price of $5 each. The original owners have 1,000 shares.
Nov. 2
	5) Purchased 500 shares of its stock at price of $5.50 each
Nov. 12
	6) Sold 1,555 sausages on account at a price of $6. Wursthaus uses FIFO perpetual inventory. Prior to the sale, it had 225 sausages that cost $3 each in its beginning inventory and purchased 1,500 sausages that cost $3.50 each on November 1.
Nov. 12
	7) Wrote-off $450 of specific bankrupt customers accounts.
Nov. 15
	8) Collected $8,580 from the sales made on account.
Nov. 30
	9) Paid second installment payment of $94 on its $4,000, 6% note that was issued on Oct. 1.
Nov. 30
	10) Declared a $0.20 cash dividend per share to its shareholders to be paid December 31.
Nov. 30
	A1) Recorded the adjusting entry for uncollectible accounts. $500 of accounts receivables is estimated to be uncollectible. Recall that there was a beginning balance of $435 and a write off of $450.
Nov. 30
	A2) Adjusted for insurance used during the month. On September 1, $600 of insurance was paid in advance for eight months of insurance coverage.
Nov. 30
	A3) Adjusted for the use of the equipment with useful lives of 4 years. The original cost of the equipment is $2,400 with $0 residual value.
Nov. 30
	A4) Adjusted for $500 of wages owed that will be paid in the first week of December.

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