Chris's Florist Shop records all prepaid costs as assets and all revenue collected in advance as liabilities, and makes adjustments only at its fiscal year end, which is June 30. All of Chris's purchases are for cash unless stated otherwise. The following information relates to Chris's June 30, 2014 year end, its first year of operations.
1. On July 2, 2013, Chris purchased equipment for $12,000. The equipment is expected to have a useful life of 8 years.
2. On August 1, 2013 a one-year insurance policy was purchased for $1,740.
3. On February 1, 2014 a corporate customer paid $2,080 as full payment for a one year contract for fresh flowers to be delivered to its offices every Monday morning. At June 30, 21 of the required 52 deliveries had been completed.
4. On July 2, 2013 Chris purchased enough supplies to last the entire first year of operations for $4,400. At June 30, 2014, Chris counted the supplies on hand and calculated the cost, which amounted to $1,035.
5. On May 31, 2014 Chris borrows $20,000 from the bank to increase the amount of inventory and expand the business. The interest rate on the loan is 6% and requires monthly payments of interest on the first of each month. The principal is due in one year's time. The first interest payment is due July 1.
6 Chris pays her store assistant on alternate Fridays. The last pay day in June was June 20 and the first pay day after year end is July 4. The assistant worked 30 hours during this period, of which 20 were in July, and the rest in June. The assistant earns $9.50 an hour.
7. June 28 is a busy day and Chris has to make deliveries to numerous customers. On July 5 she reviews her June billings, and realizes that she made one large sale for $325 on June 30 for flowers that were delivered, but for which no invoice was issued. The sale was to a regular customer who will pay promptly when the invoice is sent.
Instructions:
a. For each transaction, prepare any adjusting entries required at June 30, 2014.
b. Assume that before making the above adjustments, Chris's Florist Shop's profit was $6,570.
Calculate what the correct profit is after recording all of the adjustments.

Question

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The Answer of Chris's Florist Shop records all prepaid costs as assets and all revenue collected in advance as liabilities, and makes adjustments only at its fiscal year end, which is June 30. All of Chris's purchases are for cash unless stated otherwise. The following information relates to Chris's June 30, 2014 year end, its first year of operations.
1. On July 2, 2013, Chris purchased equipment for $12,000. The equipment is expected to have a useful life of 8 years.
2. On August 1, 2013 a one-year insurance policy was purchased for $1,740.
3. On February 1, 2014 a corporate customer paid $2,080 as full payment for a one year contract for fresh flowers to be delivered to its offices every Monday morning. At June 30, 21 of the required 52 deliveries had been completed.
4. On July 2, 2013 Chris purchased enough supplies to last the entire first year of operations for $4,400. At June 30, 2014, Chris counted the supplies on hand and calculated the cost, which amounted to $1,035.
5. On May 31, 2014 Chris borrows $20,000 from the bank to increase the amount of inventory and expand the business. The interest rate on the loan is 6% and requires monthly payments of interest on the first of each month. The principal is due in one year's time. The first interest payment is due July 1.
6 Chris pays her store assistant on alternate Fridays. The last pay day in June was June 20 and the first pay day after year end is July 4. The assistant worked 30 hours during this period, of which 20 were in July, and the rest in June. The assistant earns $9.50 an hour.
7. June 28 is a busy day and Chris has to make deliveries to numerous customers. On July 5 she reviews her June billings, and realizes that she made one large sale for $325 on June 30 for flowers that were delivered, but for which no invoice was issued. The sale was to a regular customer who will pay promptly when the invoice is sent.
Instructions:
a. For each transaction, prepare any adjusting entries required at June 30, 2014.
b. Assume that before making the above adjustments, Chris's Florist Shop's profit was $6,570.
Calculate what the correct profit is after recording all of the adjustments.

Chris's Florist Shop Records All Prepaid Costs as Assets and All