Fort Worth Corporation began business in January 2010 as a commercial carpet-cleaning and drying service. Shares of stock were issued to the owners in exchange for cash. Equipment was purchased by making a down payment in cash and signing a note payable for the balance. Services are performed for local restaurants and office buildings on open account, and customers are given 15 days to pay their accounts. Rent for office and storage facilities is paid at the beginning of each month. Salaries and wages are paid at the end of the month. The following amounts are from the records of Fort Worth Corporation at the end of its first month of operations:

Required
1. Prepare an income statement for the month ended January 31, 2010.
2. Prepare a balance sheet at January 31, 2010.
3. What information would you need about Notes Payable to fully assess Fort Worth's long-term viability? Explain youranswer.

Transcribed Image Text:

Accounts receivable Capital stock Cash Cleaning revenue Dividends $24,750 80,000 51,650 45,900 5,500 Equipment Notes payable Rent expense Retained earnings Salary and wage expense $62,000 30,000 3,600 8,400