Question

GloArt, Inc. entered into the following transactions during January 2019 a) Received $30,000 for January services b) Provided $10,000 in design services on account. c) Collected $8,000 from customers on account. d) Collected $10,000 in advance on a prepaid contract. e) Provided S3,000 of design services under contract in item d. t) Used $450 of supplies on the work described in item e. g) Paid $26,000 for January salaries. h) Paid S3,000 for one year's insurance coverage, and S12,000 for six months' rent. i) Received a $50 January telephone bill. j) Purchased $400 of supplies on account. k) Paid $3,500 for office chairs.

Answer 1

1. Assets:

Cash :

Jan 1	9,100	g.	26,000
a.	30,000	h.	15,000
d.	10,000	k.	3,500
Jan 31	4,600

Accounts Receivable:

Jan 1	5,000	c.	8,000
b.	10,000
Jan 31	7,000

Supplies:

Jan 1	900	f.	450
j.	400
Jan 31	850

Prepaid Expenses:

Jan 1	0	Jan 31	2,250
h.	15,000
Jan 31	12,750

Furniture:

Jan 1	21,000
k.	3,500
Jan 31	24,500

Liabilities:

Accounts Payable

		Jan 1	500
		i.	50
		j.	400
		Jan 31	950

Notes Payable:

		Jan 1	15,000
		Jan 31	15,000

Unearned Revenue:

e.	3,000	Jan 1	0
		d.	10,000
		Jan 31	7,000

Stockholders' Equity:

Common Stock:

		Jan 1	16,000
		Jan 31	16,000

Retained Earnings:

		Jan 1	4,500

Design Revenue:

		a.	30,000
		b.	10,000
		e.	3,000
		Jan 31	43,000

Wage Expense:

Jan 1	0
g.	26,000
Jan 31	26,000

Utilities Expense:

Jan 1	0
i.	50

Supplies Expense:

Jan 1	0
f.	450

2.

GloArt Inc. Income Statement For the month ended January 31, 2019
	Cash Basis	Accrual Basis
	$	$
Design Revenue	48,000	43,000
Less: Expenses
Wage Expense	26,000	26,000
Rent Expense	12,000	0
Insurance Expense	3,000	0
Utilities Expense	0	50
Supplies Expense	0	450
Total Expenses	41,000	26,500
Net Operating Income	7,000	16,500

3.

GloArt Inc. Statement of Cash Flows For the month ended January 31, 2019
Cash Flows from Operating Activities	$	$
Cash Received from Customers		48,000
Less:
Cash paid for wages	(26,000)
Cash paid for rent	(12,000)
Cash paid for insurance	(3,000)	(41,000)
Net Cash Flows from Operations		7,000