In May, you started a new business with only $10,000 cash. You are very excited about your new venture, but it has also been keeping you very busy. It is now June and you are running short on cash, which is concerning. In fact, you have no idea how your new company is performing financially. You have never even taken an accounting course before.

You decided to hire an accountant to help you with your bookkeeping. The accountant has requested some information to help them with financial information. Due to COVID-19 social distancing rules you are not allowed to meet in the office. Instead you will have to communicate via email. The following is the email request from your new accountant.

Dear Client,

Congratulations on your new venture! Thank you for choosing Kontur and Associates as your accounting firm. Please provide us the following information so that we may assist you in compiling the following financial statements for last month:

• Income Statement
• Balance Sheet
• Statement of Changes in Equity

In order to assist you please provide us with the following information:

• The name and brief description of your operations and structure of your business.
• Description of all the transactions for the month of May.

We look forward to hearing back from you.

Sincerely,

Anita Bean Kontur, CPA

INSTRUCTIONS

Phase 1: Business Owner

As the business owner please respond to Ms. Kontur's email providing her the following information:

1. A description of your business , including the name, type of business and structure / form of your business.
2. A description of all the business activity for the month including the dollar amounts. The activity must comprise of:

• 6 operating activities
• 3 investing activities
• 3 financing activities

Phase 2: Bookkeeper

As an employee of Kontur and Associates you have been asked to compile the information requested by the client. Based on the information provided in the email complete the following information for Ms. Kontur's.

1. Enter the journal entries to record all of the business activity for the month of May.
2. Compile a trial balance from the journal entries.
3. Make the income statement, statement of changes in equity and balance sheet for your client.
4. Write email to Ms. Kontur to submit with the file. Discuss the following:

• As you are very ambitious and want to demonstrate your analytical skills, provide your insight on the financial performance of your clients first month of business.
• After completing the financial statements, the client sent another email to you (see Appendix A). Explain to Ms. Kontur how this new information would change the financial statements you already prepared