Question

Jeffrey Lopez began a professional practice on June 1 and plans to prepare financial statements at the end of June. During June, the firm completed the following transactions:

Owner invested $60K cash in the company along with equipment that had a $15K market value in exchange for its common stock

The company paid $1,500 cash for rent for the month of June

The company purchased $10K of additional equipment on credit (payment due in 30 days)

The company completed work for a client and immediately collected the $2,500 cash earned

The company completed work for a client and sent a bill for $8K to be received within 30 days

The company purchased additional equipment for $6K cash

The company paid an assistant cash $3K cash as wages for the month

The company collected $5K cash as partial payment from the customer in transaction e above

The company paid $10K cash to settle the liability created in transaction c

The company paid $1K cash dividends to its owner (sole shareholder)

You are required to:

(1) Summarize and post the above transactions

(2) Prepare an income statement

(3) Prepare a balance sheet

Answer 1

Date	Accounts title	Dr	Cr
a	Cash	$60,000
	Equipment	15000
	Common stock		$75,000
b	Rent expenses	$1,500
	Cash		$1,500
c	Equipment	$10,000
	Accounts payable		$10,000
d	Cash	$2,500
	Service Revenue		$2,500
e	Accounts Receivable	$8,000
	Service Revenue		$8,000
f	Equipment	$6,000
	cash		$6,000
g	Wages expenses	$3,000
	Cash		$3,000
h	Cash	$5,000
	Accounts Receivable		$5,000
i	Accounts payable	$10,000
	Cash		$10,000
j	Cash dividend	1000
	Cash		1000
	Income statement
	Service revenue		$10,500
	Less: operating expenses
	Rent expenses	$1,500
	Wages expenses	$3,000	$4,500
	Net income		$6,000
	Balance Sheet
	Assets
	Current Assets
	Cash (60000-1500+2500-6000-3000+5000-10000-1000)	46000
	Accounts receivable	3000
	Total Current Assets	49000
	Equipment	31000
	Total Assets	80000
	Liabilities & stockholder equity
	stockholder equity
	Common stock	75000
	Retained Earning	5000
	Liabilities & stockholder equity	80000

If any doubt please comment