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Dog Concierges, LLC

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by

Jasmine Singleton

on 8 September 2014

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Transcript of Dog Concierges, LLC

Dog Concierges, LLC
Introduction
*Jeff Birch, owner of Dog Concierges, LLC asks his accountant/sister, Jennifer Birch to give him a “crash course” in accounting so he can train her replacement when she leaves his company.
Common Business Events
1. Sold capital stock for $15,000 to three investors
Cash $15,000
Investor 1 Common Stock $5,000
Investor 2 Common Stock $5,000
Investor 3 Common Stock $5,000

Part II
Using the net income and depreciation figures from the income statement and the balance sheet changes, Jeff constructed a statement of cash flows for this year.
Statement of Cash Flows
Part III
Jeff decided to use the statement of cash flows for the previous year and the balance sheet as of the end of the previous year to re-create the balance sheet for the year ended two years earlier.
Balance Sheet
Case Summary
Blake Prestage
Mary Rogers
Jasmine Singleton

2. Purchased $55,000 of product raw material on account from suppliers
Raw materials inventory $55,000
Accounts Payable $55,000
3. Sold products for $40,000 cash that had cost $29,000 to make
Cash $40,000
Cost of Goods Sold $29,000
Gain on Sale Revenue $11,000

4. Borrowed $30,000 from the bank, due in 120 days, with an interest rate of 6%
Cash $30,000
Notes Payable $30,000
5. Collected a $4,500 account receivable from a veterinarian customer
Cash $4,500
Accounts Receivable $4,500
6. Bought a used pickup truck for $8,000 cash
Equipment (PP&E) $8,000
Cash $8,000
7. Disbursed cash dividends of $1,500 to owners
Dividend Expense $1,500
Cash $1,500
8. Paid a $2,500 account payable owed to a supplier
Accounts Payable $2,500
Cash $2,500
9. Recognized $3,500 annual depreciation on a small warehouse the company owned
Depreciation Exp $3,500
Accumulated Depreciation $3,500

10. Sold an old shed no longer needed that had a recorded cost of $14,000 for $17,500 cash
Cash $17,500
PP&E $14,000
Gain on Sale $3,500
11. Accrued 90 days of interest on the bank loan
Interest Expense $444
Interest Payable $444
*Jennifer breaks his learning into a few parts beginning with the fundamentals in recognizing various accounts to constructing financial statements.
”What does the Dog Concierges, LLC case illustrate about the theory and practice of financial management?”

*Covers the fundamentals of account recognition and recording entries for financial transactions

*Construction and understanding of financial reports

*Ethical dilemma in relationship between Jeff and Jennifer
Full transcript