M.Bramstedt commenced business on 31 October 2013 as a hairdresser operating as iCutHair. Transactions for the month of October were:
October 1 Started business by contributing capital of $60 000 (inheritance from grandmother).
2 Paid rent for month of October $6400.
3 Purchased hairdressing supplies for the year $10000 cash.
4 Bought fixtures and fittings for the hairdressing salon (chairs, wash basins, cash register, couch) on credit from Federation Furniture $24000.
8 Paid apprentice wages $1000 for first week's work.
15 Banked takings from first full week of operations $7000.
Paid apprentice for week's work $1000.
18 Bought new light fitting for $1400 from local artist and paid cash.
22 Banked takings from second week of operations $10000.
Paid apprentice wages $1000.
24 Withdrew $3000 cash from business for personal use.
27 Banked takings $6400.
31 Paid monthly electricity and gas $840.
Required
a. Prepare an income statement for iCutHair for the period ended 31 October 2013.
b. Prepare a balance sheet for iCutHair as at 31 October 2013.