Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please prepare an income statement with the given information. You have been hired as an accountant for NFT Consulting Inc. This business was created when

Please prepare an income statement with the given information.

You have been hired as an accountant for NFT Consulting Inc. This business was created when some friends decided to make use of their newly minted college degrees and go into business together. The business was created on November 1, 2017. The company will have a fiscal year end of October 31st. The initial formation transactions and early purchases for NFT Consulting Inc. resulted in the balances that are included in the first 2 columns of the Worksheet. (see the worksheet tab)

During November, the first month of operations, the following transactions occurred:
Date Event
1-Nov Paid $7,200 for 12 months rent on office space
2-Nov Purchased office furniture for $8,950.
3-Nov Purchased $11,354 of additional office supplies on account.
8-Nov Borrowed 20,000 from the bank for operating cash. The note has a 3% interest rate (simple interest) and is to be paid back in 4 years
15-Nov Received $10,800 from Fortuna Inc. for work to be performed over the next 12 months.
20-Nov Paid $1,560 for utilities.
21-Nov Performed services for various customers for $13,200 cash and another $18,100 on account.
25-Nov Paid $8,650 for purchases of supplies previously made on account.
27-Nov Paid salaries to employees totaling $5,200 for 1 week.
30-Nov Collected $12,300 as payment for amounts previously billed.
30-Nov Dividends of $3,000 were declared and paid.
At the end of November, the following additional information is available to help determine what adjustments are needed:
30-Nov One month of the prepaid rent has been used up
30-Nov Supplies on hand are $8,150.
30-Nov One month of interest has accrued on the note payable for the bank loan.
30-Nov One month of the services for the Fortuna Inc. has been performed (see above).
30-Nov Salaries of $5,200 are paid every Friday (for a 5 day work week). November 30, 2017 was a Thursday.
30-Nov Additional work for customers of $9,580 has been performed during the last week of November but not yet billed
30-Nov Depreciation expense for the computer equipment is $140 and for the office furniture is $120

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing E4 Im

Authors: KNAPP

4th Edition

0324048602, 978-0324048605

More Books

Students also viewed these Accounting questions

Question

what is the mobility?

Answered: 1 week ago