Estabished new business new owner purchased all its common s

Estabished new business, new owner purchased all its common stock for $125,000. Paid $2,500 in attorney fees for legal document. Paid $90,000 for medical instruments, furniture, and equipment. Signed 3 year lease for office space for $5,000/month. During the first month received $18,500 for services rendered and supplies sold. Paid $1,500 for medical supplies, $500 for office supplies, $13,750 for wages. At the end of the month the business had medical and office supplies in inventory. How do you prepare an income statement and balance sheet with above information?

Solution

Income statement Service revenue 18500 Less: Expesnes Legal fees 2500 Office rent 5000 Wages expense 13750 21250 Net loss -2750 Balance sheet Assets Cash 35250 (125000-2500-90000+18500-1500-500-13750) Medical supplies 1500 Office supplies 500 Medical instruments,Furniture and equipment 90000 Total 127250 Liabilities and stockholder\'s equity: Liabilities Rent payable 5000 Stockholder\'s equity Common stock 125000 Retained earnings -2750 Total 127250