Question

Question 1: BreakToMeasure Testing Lab Copy After several months of planning, Denise Murphy started a structural lab-test business for the civil engineering and construction industries called BreakToMeasure. The following events occurred during its first month: a. Murphy started the firm, investing $3,000 cash and $15,000 of equipment. b. Break To Measure paid $1,000 cash for furniture and equipment for the shop. c. BreakToMeasure accrued $500 to rent space in a strip mall for the current month; hasn't paid cash yet. d. Break To Measure opened for business. Some customers paid in cash for the services in the amunt of $825. e. The firm provided $200 of lab-test services on account (IE: it issued the customer an invoice). f. The firm received a $50 check for the lab-test services previously rendered on account. (assume check = cash) g. The firm paid $125 cash to an assistant for working during the grand opening. h. Murphy paid a $400 on the invoice it received in c) above. i. The firm paid $1,000 cash dividends to Murphy. a) Prepare a set of journal entries, using the cr/dr convention (11.25) b) Prepare a balance sheet as of the end of the first month (7.5) c) Prepare an income statement for the first month (3) d) Prepare an Owners Equity statement for the month (4.5) e) Prepare an direct cash flow statement for the first month (9) f) Prepare an indirect cash flow statement (8)

Answer 1

a.

Date	Account Titles	Debit	Credit
a	Cash	$         3,000
	Equipment	$       15,000
	Capital		$       18,000
b	Furniture and Equipment	$         1,000
	Cash		$         1,000
c	Rent Expense	$             500
	Rent Payable		$             500
d	Cash	$             825
	Service Revenue		$             825
e	Account Receivables	$             200
	Service Revenue		$             200
f	Cash	$               50
	Account Receivables		$               50
g	Salaries Expense	$             125
	Cash		$             125
h	Rent Payable	$             400
	Cash		$             400
i	Dividends	$         1,000
	Cash		$         1,000

c.

Income Statement
Revenues
Service Revenue	$         1,025
Operating Expenses
Rent Expense	$             500
Salaries Expense	$             125
Total Operating Expenses	$             625
Net Income	$             400

d..

Statement of Owner's Equity
Beginning Balance	$                -
Add : Capital Introduced	$       18,000
Add : Net Income	$             400
	$       18,400
Less : Dividend	$         1,000
Ending Balance	$       17,400

b.

Balance Sheet
Assets
Current Assets
Cash	$         1,350
Accounts Receivable	$             150
Total Current Assets		$         1,500
Non-Current assets
Property, Plant and Equipment
Furniture and Equipment	$       16,000	$       16,000
Total Assets		$       17,500
Liabilities & Owner's Equity
Current Liabilities
Rent Payable	$             100
Total Current Liabilities		$             100
Owner's Equity
Capital	$       17,400
Total Owner's Equity		$       17,400
Total Liabilities & Owner's Equity		$       17,500

As per HOMEWORKLIB RULES we are supposed to answer 4 parts, i have answered 4, so kindly post other parts separately