Question

make a balance sheet for accounts and balances

1. Invest $40,000 in your own business

2. Borrow an additional $60,000 for five years to invest in the business.

3. Buy office equipment for cash: $25,000 (useful for five years)

4. Buy inventory of office supplies on account: $10,000

5. Prepay rent on office space for one year: $18,000

Continued:
1. Use $1,000 of office supplies in creating first project

2. Pay employees $1,500 for work done on first project

3. Receive payment of $14,000 for first project: $7,000 cash and $7,000 on account.

4. Pay utility bill of $800 with cash.

5. Receive bill for installation of information system: $600, to be paid later.

Answer 1

Balance Sheet
Assets		Liabilities & Equity
Cash	$ 61,700	Accounts Payable	$10,600
Accounts Receivable	7,000
Office Supplies	9,000	Notes Payable	60,000
Prepaid Rent	18,000
		Common Stock	40,000
Office Equipment	25,000	Retained Earnings	10,100
Total Assets	$ 120,700	Total Liabilities & Equity	$ 120,700

Income Statement
Revenue		$ 14,000
Expenses
Salaries Expense	1,500
Supplies Expense	1,000
Utilities Expense	800
Installation Expense	600	3,900
Net Income		$ 10,100