Using your answer from Exercise 1-20, prepare an income statement, a statement of changes in equity, and a balance sheet using the formats provided.

Analysis Component: Identify which assets were financed by:

a. Liabilities

b. Owner investment

c. Profit

Also identify the amount(s) for each.

Exercise 1-20

Mailin Moon is a freelance writer who submits articles to various magazines and newspapers. She operates out of a small office where she employs one administrative assistant. The following activities occurred during March 2020, her first month of business:

a. Moon invested $2,500 worth of equipment into her business along with $3,000 cash.
b. Submitted a series of articles to The Globe and Mail and received $6,500 cash.
c. Purchased supplies on credit; $600.
d. Paid the part-time administrative assistant’s salary of $1,450.
e. Moon ordered $3,000 of office equipment from the IKEA catalogue. It is scheduled to arrive in April or May.
f. Paid the rent for the first month; $1,400.
g. Submitted an article to Report on Business; will receive $4,500 next month.

Transcribed Image Text:

Mailin Moon-Freelance Writing Income Statement For Month Ended March 31, 2020 Revenues: Freelance writing revenue. Operating expenses: Salaries expense. Rent expense. Total operating expenses. Profit. Mailin Moon-Freelance Writing Statement of Changes in Equity For Month Ended March 31, 2020 Mailin Moon, capital, March 1. Investments by owner. Profit. Mailin Moon, capital, March 31. Mailin Moon-Freelance Writing Balance Sheet March 31, 2020 Assets Liabilities Cash. Accounts payable. Accounts receivable. Supplies. Equity Mailin Moon, capital.. Equipment Total liabilities and equity. Total assets