Prepare an income statement and balance sheet using the transactions listed below.

January 1 Owner, Tom Ford, invested $260,000 cash along with office equipment that had a $90,000 market value in exchange for 35,000 shares of $10 par value common stock in Celebrity Consultants, Inc.

January 1 Purchased land and an office building for $140,000, of which $20,000 was attributable to the fair market value of the land. A $50,000 cash down payment was made and a 5% five-year note was signed for the balance. Interest and 20% of the principal will be paid annually on this date. (Assume a 360-day year for interest computation purposes.)

January 1 Purchased a one-year insurance policy, effective January 1, for $2,400.

January 3 Purchased office supplies of $3,600 on account from Office Depot.

January 5 Established a petty cash fund of $400.

January 7 Placed an order with the LA Times newspaper for advertising, which will run during January, February, and March. The advertising, which cost $1,800, was paid for on this date in order to obtain a lower price.

January 10 Completed consulting job for Brad Pitt, and billed him total of $12,000, due in 30 days.

January 12 Completed consulting job totaling $18,500 for Beyonce Knowles, and collected $10,000 cash with the balance due in 30 days.

January 15 Paid the semi-monthly payroll, which totaled $8,000, to the firms workers, all of which are classified as independent contractors.

January 18 Received $15,000 from Tiger Woods for 6 months consulting services to begin February 1.

January 19 Paid Office Depot $2,500 on the account balance.

January 20 Received $8,000 from Brad Pitt for services billed January 10th.

January 24 Completed $5,000 consulting job for Taylor Swift and received full cash payment.

January 25 Received $4,000 from Beyonce Knowles for consulting services completed January 12.

January 30 Received the January telephone bill from AT&T for $375, due Feb 15.

January 31 Paid the payroll to firms workers for the second half of January.

January 31 Received utility bills for January due Feb 16, from SWEPCO for $360 & L.A. Water Utilities for $280.

January 31 An audit of the petty cash fund determined the following:

Receipts: Postage $ 24

Office supplies 38

Misc. Exp. 22

Currency and Coin 313

Reimburse Petty Cash and record the entry from the information above.

January 31 Declared & paid cash dividend of $.10 per share to the shareholders of record on January 31.

SUPPLEMENTAL ADJUSTING ENTRY INFORMATION:

a. An inventory of office supplies was taken on January 31 & found that $2,100 of supplies remained on hand.

b. An invoice of $280 for repair of office equipment dated January 26 had not yet been recorded.

c. The building will be depreciated on a straight-line basis over 30 years with no salvage value.

d. The equipment will be depreciated on a straight-line basis over 10 years with no salvage value.

e. Review accounts for other adjustments necessary at January 31 in addition to those indicated in items a - d.

Chart of Accounts:

Cash, Petty Cash, Accounts Receivable, Office Supplies, Prepaid Insurance, Prepaid Advertising, Office Equipment, Accumulated Depreciation, Office Equipment, Building, Accumulated Depreciation:Building, Land, Accounts Payable, Unearned Consulting Revenue, Notes Payable, Interest Payable, Common Stock, Retained Earnings, Dividends, Consulting Revenue, Interest Revenue, Payroll Expense, Advertising Expense, Insurance Expense, Interest Expense, Telephone Expense, Utilities Expense, Repairs Expense, Postage Expense, Supplies Expense, Depreciation Expense, Office Equipment, Depreciation Expense, Building, Miscellaneous Expense, Cash Over and Short, Income Summary.