Prepare an Income Statement and a Statement of Owner's Equity

question 195

Essay

Prepare an income statement and a statement of owner's equity for the month of June.Also,prepare a balance sheet at June 30.The transactions of Magna Designer Company for the first month of their operations are as follows:
• On June 1,2017,the owner Carlos Magna Designer contributed $25,000 cash to establish the business.
• The company rendered services to three clients on account with total revenues earned of $9,000.
• It then incurred an advertising expense on four different websites and promised to pay a total of $1,200 at a later date.
• On June 13,Magna Designer purchased $1,000 worth of office supplies for cash.(The supplies are not used by June 30. )
• On June 22,it received $2,000 on account from a client and deposited it into the business account.
• On June 23,it incurred $1,300 for a legal expense and paid cash.
• On June 30,Magna Designers made a payment of $500 to one of the websites that it owed for advertising provided earlier in the month.
• No owner withdrawals were paid during the month.

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Definitions:

Independent Decisions

Choices or judgments made by an individual based on their own discretion and without external influence.

Parenthood

The state or role of being a parent, involving the responsibilities of caring for and raising children.

Certain Age

A specific period in life that is often associated with particular rights, responsibilities, or developmental milestones.