Question

 1. Prepare the income statement for the month ended July 31, 2018.

 2. Prepare the statement of owner's equity for the month ended July 31, 2018. The beginning balance of capital was $0 and the owner contributed $24,000 during the month.

 3. Prepare the balance sheet as of July 31, 2018.

 4. Calculate the debt ratio as of July 31, 2018.

Sandra Sousa, Registered Dietician Trial Balance July 31, 2018 

Answer 1

1]	INCOME STATEMENT FOR THE MONTH ENDED JULY 31, 2018
	Service revenue		$    14,468
	Expenses:
	Salaries expense	$        1,300
	Rent expense	$           500
	Utilities expense	$           350	$      2,150
	Net income		$    12,318
2]	STATEMENT OF OWNER'S EQUITY
	Balance, July 1, 2018		$             -
	+Addition during the month	$     24,000
	+Net income	$     12,318
	-Withdrawals	$       2,600
	Net addition during the month		$    33,718
	Balance, July 31, 2018		$    33,718
3]	BALANCE SHEET, JULY 31, 2018
	ASSETS
	Current Assets:
	Cash	$      37,000
	Accounts receivable	$        8,700
	Office supplies	$        1,100
	Prepaid insurance	$        2,500
	Total current assets		$    49,300
	Property, Plant and Equipments:
	Equipment	$     24,000
	Total Property, Plant and Equipment [net]		$    24,000
	Total assets		$    73,300
	TOTAL LIABIITIES & OWNER'S EQUITY
	Current liabilities:
	Accounts payable	$       2,800
	Unearned revenue	$     11,782
	Total current liabilities		$    14,582
	Notes payable	$     25,000	$    25,000
	Total liabilities		$    39,582
	Owners' equity		$    33,718
	Total liabilities and owner's equity		$    73,300
4]	Debt ratio = Total debt/Total assets = 39582/73300 =	0.54