Missing information:
Karla Tanner opens a web consulting business called Linkworks and recorded the following transactions in its first month of operations.
Apr. 1 Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
Apr. 2 The company prepaid $9,000 cash for twelve months’ rent for office space. The company's policy is record prepaid expenses in balance sheet accounts.
Apr. 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
Apr. 6 The company completed services for a client and immediately received $4,000 cash.
Apr. 9 The company completed a $6,000 project for a client, who must pay within 30 days.
Apr. 13 The company paid $11,600 cash to settle the account payable created on April 3.
Apr. 19 The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts.
Apr. 22 The company received $4,400 cash as partial payment for the work completed on April 9.
Apr. 25 The company completed work for another client for $2,890 on credit.
Apr. 28 The company paid $5,500 cash in dividends.
Apr. 29 The company purchased $600 of additional office supplies on credit.
Apr. 30 The company paid $435 cash for this month’s utility bill.
Journalize, and prepare income statement and balance sheet
Answer:
Apr. 1 Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
Dr Cash 80,000
Cr Common stock 80,000
Apr. 2 The company prepaid $9,000 cash for twelve months’ rent for office space. The company's policy is record prepaid expenses in balance sheet accounts.
Dr Prepaid rent 9,000
Cr Cash 9,000
Apr. 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
Dr Equipment 8,000
Dr Supplies 3,600
Cr Accounts payable 11,600
Apr. 6 The company completed services for a client and immediately received $4,000 cash.
Dr Cash 4,000
Cr Service revenue 4,000
Apr. 9 The company completed a $6,000 project for a client, who must pay within 30 days.
Dr Accounts receivable 6,000
Cr Service revenue 6,000
Apr. 13 The company paid $11,600 cash to settle the account payable created on April 3.
Dr Accounts payable 11,600
Cr Cash 11,600
Apr. 19 The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts.
Dr Prepaid insurance 2,400
Cr Cash 2,400
Apr. 22 The company received $4,400 cash as partial payment for the work completed on April 9.
Dr Cash 4,400
Cr Accounts receivable 4,400
Apr. 25 The company completed work for another client for $2,890 on credit.
Dr Accounts receivable 2,890
Cr Service revenue 2,890
Apr. 28 The company paid $5,500 cash in dividends.
Dr Dividends 5,500
Cr Cash 5,500
Apr. 29 The company purchased $600 of additional office supplies on credit.
Dr Supplies 600
Cr Accounts payable 600
Apr. 30 The company paid $435 cash for this month’s utility bill.
Dr Utilities expense 435
Cr Cash 435
Adjusting entries:
a) On April 2, the company prepaid $9,000 cash for twelve months' rent for office space.
Dr Rent expense 750
Cr Prepaid rent 750
b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy the policy's coverage began on April 1.
Dr Insurance expense 200
Cr Prepaid insurance 200
c) Office supplies on hand as of April 30 total $1,200.
Dr Supplies expense 3,000
Cr Supplies 3,000
d) Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage value, is $500 per month.
Dr Depreciation expense 500
Cr Accumulated depreciation - equipment 500
e) The company has completed work for a client, but has not yet billed the $1,800 fee.
Dr Accrued income 1,800
Cr Service revenue 1,800
f) Wages due to employees, but not yet paid, as of April 30 total $2,600.
Dr Wages expense 2,600
Cr Wages payable 2,600
Linkworks
Income Statement
For the month ended April 30th, 202x
Service revenue $14,690
Wages expense ($2,600)
Supplies expense ($3,000)
Depreciation expense ($500)
Insurance expense ($200)
Rent expense ($750)
<u>Utilities expense ($435)</u>
Net income $7,205
retained earnings = $7,205 - $5,500 (dividends) = $1,705
Linkworks
Balance Sheet
For the month ended April 30th, 202x
Assets:
Cash $59,465
Accounts receivable $4,490
Accrued income $1,800
Prepaid rent $8,250
Prepaid insurance $2,200
Supplies $1,200
Equipment net $7,500
Total assets: $84,950
Liabilities and stockholders' equity:
Accounts payable $600
Wages payable $2,600
Common stock $80,000
Retained earnings $1,705
Total liabilities and stockholders' equity: $84,905