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C4-1 (Algo) From Recording Transactions to Preparing Accrual and Deferral Adjustments and Reporting Results on the Balance Sheet and Income Statement (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-2, LO 4-3, LO 4-4]

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[The following information applies to the questions displayed below.] RunHeavy Corporation (RHC) is a corporation that manages a local band. It had the following activities during its first month.

1. RHC was formed with an investment of $11,300 cash, paid in by the leader of the band on January 3 in exchange for common stock.
2. On January 4, RHC purchased music equipment by paying $2,900 cash and signing an $8,400 promissory note payable in three years.
3. On January 5, RHC booked the band for six concert events, at a price of $2,900 each, but no cash was collected yet.
4. Of the six events, four were completed between January 10 and 20.
5. On January 22, cash was collected for three of the four events.
6. The other two bookings were for February concerts, but on January 24, RHC collected half of the $2,900 fee for one of them.
7. On January 27, RHC paid $4,040 cash for the bands travel-related costs.
8. On January 28, RHC paid its band members a total of $2,670 cash for salaries and wages for the first three events.
9. As of January 31, the band members hadnt yet been paid wages for the fourth event completed in January, but they would be paid in February at the same rate as for the first three events.
10. As of January 31, RHC has not yet recorded the $187 of monthly depreciation on the equipment.
11. Also, RHC has not yet paid or recorded the $63 interest owed on the promissory note at January 31.
12. RHC is subject to a 10% tax rate on the companys income before tax.

C4-1 (Algo) Part 3

Required:

1. 3-a. Prepare an income statement for January 31.

2. 3-b. Prepare a classified balance sheet for January 31.