Question

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?

Answer 1

		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