(a) No depreciation has been recorded on the business vehicle. It was purchased on January 1, 2023 at a cost of $25,000. He plans to use the vehicle for 4 years at which time the resale value is estimated to be $3,000. Use straight-line depreciation.
(b) An inventory count indicated $56,000 of inventory at November 30, 2023. Udder Delight’s uses a perpetual inventory system.
(c) Udder Delights recently signed an agreement with the “Charley the Cheese” Store to supply them with Ticklemore and Wookey Hole cheese. The contract is worth $100,000 and deliveries will commence in February 2024. Udder Delight’s received and cashed a $20,000 cheque from the store in November 2023 in respect of this contract. The cash receipt was recorded as part of sales revenue.
(d) A total of four months remains on Udder Delight’s fire insurance policy. The $3,000 annual policy was paid on April 1, 2023 and was recorded as insurance expense at that time.
(e) On June 1, 2023 Udder Delights lent a long-time employee $15,000. She signed a promissory note agreeing to repay the amount on May 31, 2025. The interest rate is 6% per year with interest payable every May 31. The note has been recorded on the balance sheet but no interest has been recorded.
(f) Rent of $4,000 per month has not been paid or recorded for the last two months.