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FunkieVideo.com, a hypothetical start-up, opened for business on April 1 this year. FunkieVideo.com allows anyone to upload short personal videos, on which viewers then vote each month. The videos with the most votes will receive cash and other rewards, with a \"grand prize\" in a runoff among the winning monthly videos each year. You are the founder and president. You have not yet hired an accountant but your bank is asking for an income statement and balance sheet for the first month of operation. Transactions: 1. You started your company with $100,000 that you raised by selling stock in FunkieVideo.com, Inc. to your family and friends. 2. You purchased 26 high end servers you will need for $3,000 each, paying cash. You believe these devices will last five years before you replace them. At the end of the 5 years, you think you can sell them all for a total of $3,000. 3. Knowing that you would need additional funds, you took a $50,000 loan at 12% annual interest rate from the bank, using the servers as collateral. 4. You spent $2,000 on supplies, which you charged on account. 5. A PR agency charges you $500 for the promotion services (they hope for more business as you grow). You plan on paying the bill next month. 6. Rent for the space you have leased is $1,000 a month, which you paid. 7. The first month, you bill 10 charter clients $200 each for home page ads. 8. You pay your freelance programmer $2,000 at the end of the month. 9. One of your advertisers paid the $200 invoice you sent earlier in the month. 10. You write the check for the interest on the loan owed for the month. 11. You send payment of $300 towards the supplies that you bought earlier in the month. 12. You record one month of depreciation on the servers. Assets Cash Liabilities Accounts Receivable Supplies Equip (Accum. Deprec.) = Notes Payabl e Accts. Payable Equity Common Stock Retained Earnings Revenue (Expense) FunkieVideo.com, Inc. Income Statement Month ended April 30, 2008 Revenues Operating Expenses Rent Wages Advertising Supplies Depreciation Total operating expenses $ $ EBIT (Loss) Interest expense Net Profit (Loss) $ FunkieVideo.com, Inc. Balance Sheet Month Ending April 30, 2008 ASSETS Current Assets Cash Accounts Receivable Supplies Total Current Assets $ Fixed Assets Servers Less accumulated depreciation Net Fixed Assets Total Assets $ LIABILITIES Current Liabilities Notes Payable Accounts Payable Total Current Liabilities $ STOCKHOLDERS' EQUITY Common Stock Retained Earnings (Loss) Total Stockholders' Equity Total Liabilities & Stockholders' Equity $