Question

Whitelands Consulting, Inc. began business on January 1, 2013. It sold $100 of stock to its investors on that day. This American company lists and trades its stock on the New York Stock Exchange. During its first month of operations, Whitelands provided consulting services to two clients. On January 15, 2013, it earned $60 from its first client. The client paid cash on that date. Whitelands provided consulting services to a second client on January 30, 2013. The firm accepted the second client’s promise to pay $30 in cash during February. Whitelands paid $75 in cash to cover its January operating expenses on January 31, 2013.

1. Record the general journal entries for Whitelands during January 2013.
2. Post the journal entries to Whitelands’ ledger (or T-accounts).
3. Construct Whitelands’ trial balance.
4. Present the January 2013 income statement.
5. Present the January 2013 statement of shareholders’ equity.
6. Present the January 31, 2013 balance sheet.
7. Present the January 2013 statement of cash flows.

Answer 1

Answer 1:

Journal entries:

Answer 2:

T Accounts:

Common Stock Jan. 1, 2013 Bal. c/f $100 $100 Cash $100 Jan. 31, 2013$75 Jan. 1, 2013 Jan. 15, 2013 al.f $60 $85 Service Revenue Jan. 15, 2013 Jan. 30, 2013 Bal $60 $30 $90 Account Receivable Jan. 30, 2013 Bal c/f $30 $30 Operating Expense Jan. 31, 2013 Bal $75 $75

Answer 3:

Trial Balance:

Whitelands Consulting, Inc Trial Balance as on January 31,2013 DebitCredit $100 Common Stock Cash Service Revenue Account Receivable Operating Expense Total $85 S90 $30 $75 $190 $190

Answer 4:

Income Statement:

Answer 5:

Statement of shareholders’ equity:

Answer 6:

Balance sheet

Whitelands Consulting, Inc. Balance Sheet As of January 31, 2013 Assets Cash Account Receivable $30 Retained Earnings Amount Liabilities and Equity 85 Common Stock Amount 100 $15 Total Assets$115 Total Liabilities and Equity $115

Answer 7:

Cash flow statement: