9.Zero Soda Bottling has just completed its end-of-period analysis and adjustments. Account balances as of December 31, 2007 are as follows:
Cash$280,000Owners' equity$ 920,000
Accounts receivable180,000Sales revenue1,240,000
Merchandise460,000Cost of goods sold620,000
Accounts payable90,000Utility expense130,000
Prepare an Income Statement.
10.On March 1, 2007, Alana and Eva started the Decorating Review Company. They offer a complete line of decorative items and decorating services. Following are the transactions occurring during the first month of business:
1.The business was started by each partner contributing $9,000.
2.Each partner also contributed $6,000 worth of antique items from their own collections to the business.
3.The annual business license and permits totaled $1,500 and were paid in cash. (Hint: This will require an adjusting entry. Use the asset account titled Prepaid Business Fees.)
4.A used delivery van was purchased by paying $3,000 down and signing a three-year note payable for the $15,000 balance. Interest expense on this loan is $1,800 for the first year. The first payment is due April 15. (Hint: This will require an adjusting entry).
5.An inventory of accessories was purchased on credit for $4,500.
6.A shop was rented for $500 monthly, and the first month's rent was paid.
7.Advertising costing $700 was run in the newspaper. The bill had not yet come by the end of the month and had not been paid.
8.Services totaling $6,000 were performed during the month for cash.
9.Services totaling $10,000 were performed during the month on credit.
10.Accessories costing a total of $5,000 were sold to customers for $8,000 cash.
11.Gas, oil, and maintenance on the delivery van totaling $300 were paid for.
12.At the end of the month, Alana and Eva each withdrew $1,000 from the business for personal expenses.
Prepare an income statement for the month of March.