1. The firm was formed on January 1, Year 1 when four individuals each invested $10,000 cash. One individual also invested a truck worth $20,000 and loaned the firm $15,000.

2. The firm performed $600,000 of consulting services for clients in Year 1, collecting $380,000 from clients. Included in the $380,000 is $30,000 paid by one client for services that would not be performed until Year 2.

3. 3. The salaries for the four consultants who performed the services in item #2 were $50,000 each. These consultants had been employed for all of Year 1. 80% of this total was paid to the consultants in Year 1.

4. 4. Incidental expenses of $2,000 were paid for as the expenses were incurred. Additionally, $8,000 was charged on credit cards for items consumed in Year 1.

5. The firm paid $4,000 for insurance in Year 1 but only used up 30% of that amount during the year.

6. On May 31, Year 1, the firm leased office space for a three-year period at a monthly rate of $8,000 per

   month. The contract requires annual payments of $96,000 on May 31 of Year 2, Year 3 and Year 4. Show the effect of signing this contract on the financial statement elements.

7. The firm bought Land in June Year 1 paying $60,000 cash.

8. Half of the Land was sold for $45,000 in July Year 1.

9. The remaining half of this Land was sold in November Year 1 for $20,000

QUESTION:

In Year 2, the firm collected $650,000 from clients while performing $400,000 of services for them. The $30,000 that had been paid in advance during Year 1 is included in the $400,000. Assume Accounts Receivable balance does not change in Year 2.

_____Total Assets

__________Total Liabilities

__________Owners Equity

__________Revenues

__________Gains

__________Expenses

__________Losses

__________Income

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