9. Leon Jackson is an entrepreneur who plans to start a Web site design and maintenance business called Webworks. The First National Bank just approved a loan so he is now ready to purchase needed equipment, hire administrative help, and begin designing sites. During June, his first month of business, the following events occur. a) Webworks signs a note at the bank and is given $10,000 cash. b) Jackson deposits $2,000 of his own money into the company checking account as his capital contribution. c) Webworks purchases a new computer and other additional equipment for $3,000 in cash. d) Webworks purchases supplies worth $200 on account that should last Webworks two months. e) Webworks hires Nancy Po to assist with administrative tasks. She will charge $100 per Web site for her assistance. f) Webworks begins working on its first two Web sites, one for Juan Sanchez (a friend of Jackson's dad) and the other for Pauline Smith, a local businessperson. g) Webworks completes the site for Mr. Sanchez and sends him a bill for $600. h) Webworks completes the site for Ms. Smith and sends her a bill for $450. i) Webworks collects $600 in cash from Mr. Sanchez. j) Webworks pays Nancy Po $100 for her work on-Sanchez's Web site. k) Webworks receives $500 in advance to work on a Web site for a local restaurant. Work on the site will not begin until July. 1) Webworks pays taxes of $200 in cash.
9. Leon Jackson is an entrepreneur who plans to start a Web site design and maintenance business called Webworks. The First National Bank just approved a loan so he is now ready to purchase needed equipment, hire administrative help, and begin designing sites. During June, his first month of business, the following events occur. a) Webworks signs a note at the bank and is given $10,000 cash. b) Jackson deposits $2,000 of his own money into the company checking account as his capital contribution. c) Webworks purchases a new computer and other additional equipment for $3,000 in cash. d) Webworks purchases supplies worth $200 on account that should last Webworks two months. e) Webworks hires Nancy Po to assist with administrative tasks. She will charge $100 per Web site for her assistance. f) Webworks begins working on its first two Web sites, one for Juan Sanchez (a friend of Jackson's dad) and the other for Pauline Smith, a local businessperson. g) Webworks completes the site for Mr. Sanchez and sends him a bill for $600. h) Webworks completes the site for Ms. Smith and sends her a bill for $450. i) Webworks collects $600 in cash from Mr. Sanchez. j) Webworks pays Nancy Po $100 for her work on-Sanchez's Web site. k) Webworks receives $500 in advance to work on a Web site for a local restaurant. Work on the site will not begin until July. 1) Webworks pays taxes of $200 in cash.
Chapter16: Tax Research
Section: Chapter Questions
Problem 47RC
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Question
Transcribed Image Text:9. Leon Jackson is an entrepreneur who plans to start a Web site design and maintenance business called Webworks. The First
National Bank just approved a loan so he is now ready to purchase needed equipment, hire administrative help, and begin designing
sites. During June, his first month of business, the following events occur.
a) Webworks signs a note at the bank and is given $10,000 cash.
b) Jackson deposits $2,000 of his own money into the company checking account as his capital contribution.
c) Webworks purchases a new computer and other additional equipment for $3,000 in cash.
d) Webworks purchases supplies worth $200 on account that should last Webworks two months.
e) Webworks hires Nancy Po to assist with administrative tasks. She will charge $100 per Web site for her assistance.
f) Webworks begins working on its first two Web sites, one for Juan Sanchez (a friend of Jackson's dad) and the other for Pauline
Smith, a local businessperson.
g) Webworks completes the site for Mr. Sanchez and sends him a bill for $600.
h) Webworks completes the site for Ms. Smith and sends her a bill for $450.
i) Webworks collects $600 in cash from Mr. Sanchez.
j) Webworks pays Nancy Po $100 for her work on-Sanchez's Web site.
k) Webworks receives $500 in advance to work on a Web site for a local restaurant. Work on the site will not begin until July.
1) Webworks pays taxes of $200 in cash.
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