The Speedy Answering Service Business was started on 1 July of the current year to answer the phones of doctors, lawyers and accountants when they are away from their offices. The following transactions of the business occurred and adjustments were made in July.

Required:

a Record the above transactions in appropriate accounts.

b Prepare a simple income statement for the business for July.

c Prepare a balance sheet for the business on 31 July.
d Briefly comment on how well the business did in July.

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Date 1 Jul. 2 3 6 15 28 29 30 30 30 Transactions M Salmon started the business by investing $7500 cash. The business paid cash of $2475 including GST in advance for six months' rent of office space. The business purchased telephone equipment costing $13750 including GST, paying $3750 down and signing a $10000 note payable for the balance owed. Office supplies totaling $1237.50 including GST were purchased on credit. The amount is due in early August. The business collected $2200 including GST from clients for answering services performed during the first half of July. Salmon withdrew $1500 for personal use. The April $275 including GST utility bill was received; it is to be paid in August. The business paid $875 salary to a part-time employee. This includes $125 PAYG tax. Clients were billed $1925 including GST for answering services performed during the last half of July. Salmon recorded the following adjustments: a Rent expense for July b Depreciation of $105 on telephone equipment c Interest of $100 on the note payable d Office supplies used of $145.