he following information applies to the questions displayed below.] RunHeavy Corporation (RHC) is a corporation that manages a local band. It had the following activities during its first month. RHC was formed with an investment of $11,900 cash, paid in by the leader of the band on January 3 in exchange for common stock. On January 4, RHC purchased music equipment by paying $2,300 cash and signing an $9,600 promissory note payable in three years. On January 5, RHC booked the band for six concert events, at a price of $2,800 each, but no cash was collected yet. Of the six events, four were completed between January 10 and 20. On January 22, cash was collected for three of the four events. The other two bookings were for February concerts, but on January 24, RHC collected half of the $2,800 fee for one of them. On January 27, RHC paid $3,440 cash for the band’s travel-related costs. On January 28, RHC paid its band members a total of $2,490 cash for salaries and wages for the first three events. As of January 31, the band members hadn’t yet been paid wages for the fourth event completed in January, but they would be paid in February at the same rate as for the first three events. As of January 31, RHC has not yet recorded the $178 of monthly depreciation on the equipment. Also, RHC has not yet paid or recorded the $72 interest owed on the promissory note at January 31. RHC is subject to a 20% tax rate on the company’s income before tax. Required: 3-a. Prepare an income statement for January 31. 3-b. Prepare a classified balance sheet for January 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

[The following information applies to the questions displayed below.]

RunHeavy Corporation (RHC) is a corporation that manages a local band. It had the following activities during its first month.

RHC was formed with an investment of $11,900 cash, paid in by the leader of the band on January 3 in exchange for common stock.
On January 4, RHC purchased music equipment by paying $2,300 cash and signing an $9,600 promissory note payable in three years.
On January 5, RHC booked the band for six concert events, at a price of $2,800 each, but no cash was collected yet.
Of the six events, four were completed between January 10 and 20.
On January 22, cash was collected for three of the four events.
The other two bookings were for February concerts, but on January 24, RHC collected half of the $2,800 fee for one of them.
On January 27, RHC paid $3,440 cash for the band’s travel-related costs.
On January 28, RHC paid its band members a total of $2,490 cash for salaries and wages for the first three events.
As of January 31, the band members hadn’t yet been paid wages for the fourth event completed in January, but they would be paid in February at the same rate as for the first three events.
As of January 31, RHC has not yet recorded the $178 of monthly depreciation on the equipment.
Also, RHC has not yet paid or recorded the $72 interest owed on the promissory note at January 31.
RHC is subject to a 20% tax rate on the company’s income before tax.

Required:

3-a. Prepare an income statement for January 31.
3-b. Prepare a classified balance sheet for January 31.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Legal, Regulatory and Professional Obligations of Auditors

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions