Please prepare a Profit and Loss statement for the combined January and February entries.

In January:

You start your own business, a sole proprietorship, as an environmental consultant on January 1, 2017, doing business as EH & S Consulting. You contract with clients to perform consulting services and charge them an hourly rate for your time. Clients will also reimburse you for out of pocket expenses such as photo copy costs, travel expenses, and any other out-of-pocket expenses.

Because you are a personal services company you decide to keep your books and records on a cash basis rather than an accrual basis.

To start your business you take $5,000.00 from your personal savings account and borrow $30,000.00 from your local bank. The bank loan is for five years at 5.5% interest and your monthly payment which starts on February 1^st is $573.00. The amortization table for the loan is at the end of this problem.

You rent office space for $1,500.00 per month by signing a two-year lease. You pay $4,500.00 as the first months rent, last months rent and security deposit on January 2^nd.

You purchase $537.82 in office supplies by charging the cost on your personal credit card during the month of January and then reimburse yourself for the cost on January 31^st by writing a company check to yourself.

You buy office equipment that was listed as costing $6,000.00 for $5,250.00 (computers, copier, fax, printer, telephones) by signing a purchase agreement that allows you to take the equipment for no money down, and no interest payment, by paying $218.75 per month starting on January 15, 2017 for two years. At the end of the two year period the equipment will have no residual value.

You sign a twenty four month contract for telephone and internet service from a service provider for $125.00 per month. Your first payment was made on January 1^st and all future payments are due on the first of the month.

Your purchase business insurance (excluding malpractice insurance) and the premium for one year is $1,100.00 and is due February 1^st.

Business is good that first month, and on January 31^st you bill the following clients for services rendered:

Name Fees Reimbursable costs

Able Company $3,000.00 $329.87

Baker Company $5,000.00 $43.72

Charlie Company $1,375.00 $157.73

Delta company $6,250.00 $422.69

Total $15,625.00 $954.01

The Reimbursable costs you billed to clients was for out of pocket travel costs, so you write a check to yourself on January 31^st for $954.01.

Your cost of mailings and stamps for January was $78.32