At the beginning of 2017, three entrepreneurs decided to form a small business and organize as a corporation. Their business is called The Property People, and they will serve homeowners who require assistance with home maintenance and small home improvement projects. Until the business is established, the owners will not leave their full-time jobs. However, they all have flexibility to arrange their work schedules and cover for one another. Each investor received 100 shares of stock. In return for the shares of stock, the company received a total of $10,000 in cash from two investors who each contributed $5,000 in cash; the other investor contributed equipment valued at $5,000. The equipment has a useful life of 10 years, and the company records depreciation using the straight-line method (i.e., equal amounts each period).

During the first six-months of the year, The Property People completed jobs totaling $94,000. At the end of six months, the company owners had received cash payments of $72,000. Of the balance remaining, there is a bill for $1,600 that they do not expect to be able to collect. The homeowner who owes the $1,600 is having serious financial problems, and the owners have concluded that they will never see the $1,600 they are owed. They will account for this as a bad debt expense. The owners expect to collect the remainder of the outstanding balance. At the end of June, they had an opportunity to purchase some generators at a terrific bargain price of $4,000 in cash. They are storing the generators in their garages, and they are confident they will be able to sell them to future customers. Their expenses for the first six months total $48,000, which they have paid in cash except for $6,000 that they currently owe suppliers. The only other cash outlay is the $1,800 annual premium for liability insurance they paid at the beginning of the year.

a.) Create an income statement for the six months ended June 30, 2017. The company uses accrual accounting and follows generally accepted accounting principles.

b.) Create a balance sheet as of June 30, 2017