On Jan1,2012,William Kelly Started Kelly's Computer Service by Investing $10,000

question 109

Essay

On Jan.1,2012,William Kelly started Kelly's Computer Service by investing $10,000.On Jan.3,the business borrowed $10,000 from a creditor and executed a Note payable with the principal and interest to be due in one year.On Jan.5,the business purchased $12,000 of equipment for cash.On Jan.8,Kelly's rendered service to his first corporate client and earned $2,500 in cash.On Jan.12,Kelly's incurred repair expense of $1,200 and promised to pay the repair contractor the following month.On Jan.18,Kelly's rendered service to a new client in the amount of $6,000 "on account," (the client promised to pay the following month).At the end of January,Kelly took a withdrawal of $1,000.Please prepare an income statement for the month of January,a statement of owner's equity for the month of January,and a balance sheet at Jan.31,2012.

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Definitions:

Profitability

A financial metric indicating the degree to which a company or business earns more revenue than it spends on expenses.

Costs

Costs generally refer to the expenditure required to achieve a specific objective, such as the money spent on goods, services, production, or projects.

Benefits

Advantages or perks, often provided by employers to employees, such as health insurance, retirement plans, and paid time off.

Deontological Theory

A moral philosophy that evaluates the ethics of an action based on the action's adherence to rules or duties, regardless of the outcome.