Question 5

Safeerat Company initiated operations on July 1, 2014. The adjusted account balances as at July 31, 2014 are shown below.

Debits Credits

Cash $ 7,680 Accumulated Depreciation Equipment $ 840

Accounts Receivable 810 Notes Payable 6,000

Prepaid Rent 1,965 Accounts Payable 2,140

Supplies 1,160 Salaries and Wages Payable 360

Equipment 11,400 Interest Payable 40

Owner's Drawings 800 Unearned Service Revenue 580

Salaries and Wages Expense 7,145 Owner's Capital 10,640

Rent Expense 2,740 Service Revenue 14,390

Depreciation Expense 665 Total credits $34,990

Supplies Expense 580

Interest Expense 45

Total debits $ 34,990

Instructions:

(a) Prepare the Income Statement for the month of July 2014.

(b) Calculate the amount of Owners Capital at July 31, 2014.

(c) Prepare the Balance Sheet as at July 31, 2014 for Safeerat Company.