Jack starts a company, the company exterminates pests from office buildings and residential homes. Jack is engaging us Dan CPA in order to help him start and run the company.

Jacks first question is what type of entity (if any) should he create. Jacks biggest concern is personal liability, and ease of raising funds.

After a consultation Jack opens the entity Dan CPA recommended and the following transactions occurred.

• 1/1/2020 Jack takes $100,000 from his personal savings account and invest it in the companys checking account
• 1/2/2020 Jack uses $20,000 to purchase van
• 1/5/2020 Jack purchases $5,000 of extermination equipment
• 1/6/2020 Jack purchases $400 of supplies
• 1/17/2020 Jack signs a contract to provide a one time extermination service on Baruch for $3,500 cash, services are provided on 1/17/2020
• 1/28/2020 Jack borrows $30,000 from the bank to finance future business operations. The funds need to be repaid on 7/15/2020
• 2/1/2020 Jack purchases insurance for 23 Months for $2,300
• 2/8/2020 Jack withdraws $2,500 to pay for him and his spouse to go on vacation.
• 2/19/2020 Jack performs extermination services for Baruch College for $15,000 with an agreement that Baruch will pay at a later date
• 2/21/2020 Jack purchases additional supplies for 20,000
• 3/6/2020 Jack gets a brand new credit card for the business, the credit limit is $5,000
• 3/18/2020 Jack buys a $200 gift for Baruch college Janitorial staff for doing such a bad job cleaning the campus that they need to keep hiring him to exterminate.
• 3/28/2020 Jack hires a designer for $1,200 to make him a logo
• 4/15/2020 Jack pays estimated income tax of $3,000
• 5/1/2020 Jack gets a job to exterminate a roach infestation in a super expensive restaurant in downtown Brooklyn that charges twenty bucks for an omelet. The cost of extermination is $2,000.
• 5/18/2020 Jack pays $200 for client lunch
• 6/15/2020 Jack withdraws 2,000 to go on another vacation with his Girl Friend
• 6/30/2020 Jack withdraws $4,000 for the company to pay for a divorce lawyer
• 7/28/2020 Jack purchases additional supplies for $2,000
• 8/2/2020 Jack gets paid from Baruch job preformed on 2/19. In addition, Baruch paid a late payment fee of $2,000
• 9/1/2020 Jack rents office space for $3,000 a month (starting Sep 1, 2020)
• 9/1/2020 Jack office staff for $3,000 a month
• 10/1/2020 Jack pays rent and salary for office staff
• 10/15/2020 Jack wins an extermination contract for $300,000 to exterminate an office building. Half the funds are paid now and the rest will be paid when the job is complete.
• 10/31/2020 Jack pays rent and office staff
• 11/2/2020 Jack starts and finishes the job from 10/15/2020
• 11/18/2020 Jack withdraws $5,000 to buy his Girl Friend a new coat
• 11/30/2020 Jack pays rent and wages
• 12/09/2020 Jack buys additional supplies for $3,000
• 12/31/2020
  • Jack takes inventory and only has $4,000 of supplies on hand
  • Jack pays Rent and Wages
  • Jack Give himself a 120,000 withdrawal to buy a new car and to celebrate a great year killing bugs

Dan CPA is tasked with booking the activity for the year and creating a Balance Sheet and Income Statement. Jacks extermination business is an on an Accrual method of accounting.