Drew and Aranda CPAs, LLP began business on January 1 and will prepare monthly financial reports. Record the following transactions and adjustments for the month of January using the template provided on the next page. You only need to provide the amounts, indicating any decreases in amount by using ( ).

Transactions occurring during January:

Drew and Aranda invested $15,000 cash to begin the business in exchange for common stock.

On January 1, purchased a one-year business insurance policy for $8,400 cash

On January 1, purchased a company car for $42,000, using $5,000 as a cash down payment and borrowing the remaining balance.

Billed customers $3,500 for services performed on January 15.

Collected $1,500 from customers on their accounts billed on January 15.

Declared and paid a $1,000 cash dividend.

Balance Sheet Assets = Liabilities + Stockholders’ Equity

Income Statement

Cash Asset

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Noncash Assets

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Liabilities

+

Contrib. Capital

+

Earned Capital

Revenues

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Expenses

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Net Income

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