Prepare an income statement and balance sheet

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare an income statement and balance sheet

Date
Account
Dr
Cr
2021-01-31
Interest Expense
$500
Interest Payable
$500
Date
Account
Dr
Cr
2021-01-31
Rent Expense
$1,500
Prepaid Rent
$1,500
Transcribed Image Text:Date Account Dr Cr 2021-01-31 Interest Expense $500 Interest Payable $500 Date Account Dr Cr 2021-01-31 Rent Expense $1,500 Prepaid Rent $1,500
Jan 1. A group of investors provide $50,000 to IcanDoThis Inc. in exchange for Common Stock.
Jan 2 IcanDoThis Inc. Pays $4,500 for January, February, and March rent.
Jan. 3 IcanDoThis Inc. purchases $5,000 of equipment and pays half with cash and the rest on account.
Jan. 4 IcanDoThis Inc. purchases $10,000 of inventory on credit.
Jan 8 IcanDoThis Inc. sells inventory to customers for $9,000. The cost of the inventory is $3,000.
Jan 12 IcanDoThis Inc. sells inventory to customers for $6,000. The cost of the inventory is $2,000. The customer
IcanDoThis Inc. next week.
Jan 15 IcanDoThis Inc. purchases supplies on account for $2,500. The supplies will be used over the next 3 month:
Jan 20 IcanDoThis Inc. receives $6,000 cash from the Jan. 12th sale.
Jan 22 IcanDoThis Inc. pays $2,500 for the supplies purchased on Jan 15.
Jan 23 IcanDoThis Inc. A telephone bill in the amount of $117 covering Jan charges is unpaid at Jan 31
Jan 24 IcanDoThis Inc. Pays wages of $500 and utilities of $250 for January.
Jan 31 IcanDoThis Inc. pays dividends of $300 to the stockholders.
Jan 31 IcanDoThis Inc's utility expense for January was incurred but not paid prior to Jan. 31st totaled $520.
Jan 31 IcanDoThis Inc. owed their employees $1,900 in wages that will be paid on Sept 1st.
Jan 31 Supplies were counted at the end of the period and there were $2,000 supplies on hand.
Jan 31 The equipment purchased on January 5th has no salvage value. IcanDoThis Inc. will use it for 5 years. Round
nearest dollar. Interest is $500 per month.
Transcribed Image Text:Jan 1. A group of investors provide $50,000 to IcanDoThis Inc. in exchange for Common Stock. Jan 2 IcanDoThis Inc. Pays $4,500 for January, February, and March rent. Jan. 3 IcanDoThis Inc. purchases $5,000 of equipment and pays half with cash and the rest on account. Jan. 4 IcanDoThis Inc. purchases $10,000 of inventory on credit. Jan 8 IcanDoThis Inc. sells inventory to customers for $9,000. The cost of the inventory is $3,000. Jan 12 IcanDoThis Inc. sells inventory to customers for $6,000. The cost of the inventory is $2,000. The customer IcanDoThis Inc. next week. Jan 15 IcanDoThis Inc. purchases supplies on account for $2,500. The supplies will be used over the next 3 month: Jan 20 IcanDoThis Inc. receives $6,000 cash from the Jan. 12th sale. Jan 22 IcanDoThis Inc. pays $2,500 for the supplies purchased on Jan 15. Jan 23 IcanDoThis Inc. A telephone bill in the amount of $117 covering Jan charges is unpaid at Jan 31 Jan 24 IcanDoThis Inc. Pays wages of $500 and utilities of $250 for January. Jan 31 IcanDoThis Inc. pays dividends of $300 to the stockholders. Jan 31 IcanDoThis Inc's utility expense for January was incurred but not paid prior to Jan. 31st totaled $520. Jan 31 IcanDoThis Inc. owed their employees $1,900 in wages that will be paid on Sept 1st. Jan 31 Supplies were counted at the end of the period and there were $2,000 supplies on hand. Jan 31 The equipment purchased on January 5th has no salvage value. IcanDoThis Inc. will use it for 5 years. Round nearest dollar. Interest is $500 per month.
Date
Account
Dr
Cr
2021-01-24
Wages Expense
$500
Utilities Expense
$250
Cash
$750
Date
Account
Dr
Cr
2021-01-31
Utilities Expense
$520
Utilities Expense
Payable
$520
Date
Account
Dr
Cr
2021-01-31
Dividends
$300
Cash
$300
Date
Account
Dr
Cr
2021-01-31
Wages Expense
$1,900
Wages Payable
$1,900
Date
Account
Dr
Cr
2021-01-31
Supplies Expense
$500
Supplies
$500
Date
Account
Dr
Cr
2021-01-31
Depreciation Expense
$83
Accumulated
Depreciation -
Equipment
$83
Transcribed Image Text:Date Account Dr Cr 2021-01-24 Wages Expense $500 Utilities Expense $250 Cash $750 Date Account Dr Cr 2021-01-31 Utilities Expense $520 Utilities Expense Payable $520 Date Account Dr Cr 2021-01-31 Dividends $300 Cash $300 Date Account Dr Cr 2021-01-31 Wages Expense $1,900 Wages Payable $1,900 Date Account Dr Cr 2021-01-31 Supplies Expense $500 Supplies $500 Date Account Dr Cr 2021-01-31 Depreciation Expense $83 Accumulated Depreciation - Equipment $83
Date
Account
Dr
Cr
Accounts
2021-01-12
Receivable
$6,000
Sales Revenue
$6,000
Date
Account
Dr
Cr
2021-01-12
Cost Of Goods Sold
$2,000
Inventory
$2,000
Date
Account
Dr
Cr
2021-01-15
Supplies
$2,500
Accounts
Payable
$2,500
Date
Account
Dr
Cr
2021-01-20
Cash
$6,000
Accounts
Receivable
$6,000
Date
Account
Dr
Cr
2021-01-22
Accounts Payable
$2,500
Cash
$2,500
Date
Account
Dr
Cr
2021-01-23
Telephone Expenses
$117
Telephone
Expenses Payable
$117
Transcribed Image Text:Date Account Dr Cr Accounts 2021-01-12 Receivable $6,000 Sales Revenue $6,000 Date Account Dr Cr 2021-01-12 Cost Of Goods Sold $2,000 Inventory $2,000 Date Account Dr Cr 2021-01-15 Supplies $2,500 Accounts Payable $2,500 Date Account Dr Cr 2021-01-20 Cash $6,000 Accounts Receivable $6,000 Date Account Dr Cr 2021-01-22 Accounts Payable $2,500 Cash $2,500 Date Account Dr Cr 2021-01-23 Telephone Expenses $117 Telephone Expenses Payable $117
Date
Account
Dr
Cr
2021-01-01
Cash
$50,000
Common Stock
$50,000
Date
Account
Dr
Cr
2021-01-02
Prepaid Rent
$4,500
Cash
$4,500
Date
Account
Dr
Cr
2021-01-03
Equipment
$5,000
Cash
$2,500
Accounts
Payable
$2,500
Date
Account
Dr
Cr
2021-01-04
Inventory
$10,000
Accounts
Payable
$10,000
Date
Account
Dr
Cr
Accounts
2021-01-08
Receivable
$9,000
Sales Revenue
$9,000
Date
Account
Dr
Cr
2021-01-08
Cost Of Goods Sold
$3,000
Inventory
$3,000
Transcribed Image Text:Date Account Dr Cr 2021-01-01 Cash $50,000 Common Stock $50,000 Date Account Dr Cr 2021-01-02 Prepaid Rent $4,500 Cash $4,500 Date Account Dr Cr 2021-01-03 Equipment $5,000 Cash $2,500 Accounts Payable $2,500 Date Account Dr Cr 2021-01-04 Inventory $10,000 Accounts Payable $10,000 Date Account Dr Cr Accounts 2021-01-08 Receivable $9,000 Sales Revenue $9,000 Date Account Dr Cr 2021-01-08 Cost Of Goods Sold $3,000 Inventory $3,000
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