Overview
Vibrant Garden Care Co.
The Business Situation
In the bustling town of Greenhaven, the Vibrant Garden Care Co. embarked on its journey to provide top-notch lawn and garden care services on March 1, 2023. Founded by Keri Ann Nickels, a passionate entrepreneur with a green thumb, the company aims to transform and maintain the beauty of its clients' outdoor spaces through a wide range of services, including lawn maintenance, landscaping, and garden care. With a commitment to sustainability and customer satisfaction, Vibrant Garden Care Co. quickly started to make its mark in the local market.
As the end of its first operating month approaches, the company seeks to understand its financial performance and position. The preliminary financial information presents a snapshot of the company's financial activities and commitments, including initial investments in equipment, insurance coverage for operations, and the generation of revenue through its services. This period also saw the company extending its services to customers through pre-paid packages, reflecting a promising start to its customer engagement strategy.
At March 31, the trial balance shows the following balances for selected accounts:
|
Account |
Balance |
|
Prepaid Insurance |
$ 4,800 |
|
Equipment |
$ 35,000 |
|
Notes Payable |
$ 25,000 |
|
Unearned Revenue |
$ 5,500 |
|
Service Revenue |
$ 2,300 |
Analysis reveals the following additional data:
a.Prepaid insurance is the cost of a 2-year insurance policy, effective March 1.
b.Depreciation on the equipment is $600 per month.
c.The note payable is dated March 1. It is a 9-month, 10% note.
d.Nine customers paid for the company’s 6 months' lawn service package of $700 beginning in March. The company performed services for these customers in March.
e.Lawn services provided to other customers but not recorded at March 31 totaled $2,000.