Question

PLEASE ANSWER THE INCOME STATEMENT AND BALANCE SHEET AND IMPACT ON INCOME!!!!!

Karla Tanner opened a web consulting business called Linkworks and recorded the following transactions in its first month of operations.

Apr.		1		Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
Apr.		2		The company prepaid $9,000 cash for twelve months’ rent for office space. The company's policy is record prepaid expenses in balance sheet accounts.
Apr.		3		The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
Apr.		6		The company completed services for a client and immediately received $4,000 cash.
Apr.		9		The company completed a $6,000 project for a client, who must pay within 30 days.
Apr.		13		The company paid $11,600 cash to settle the account payable created on April 3.
Apr.		19		The company paid $2,400 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts.
Apr.		22		The company received $4,400 cash as partial payment for the work completed on April 9.
Apr.		25		The company completed work for another client for $2,890 on credit.
Apr.		28		The company paid $5,500 cash in dividends.
Apr.		29		The company purchased $600 of additional office supplies on credit.
Apr.		30		The company paid $435 cash for this month’s utility bill.

Descriptions of items that require adjusting entries on April 30, 2017, follow.

• a) On April 2, the company prepaid $9,000 cash for twelve months' rent for office space.

• b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy the policy's coverage began on April 1.

• c) Office supplies on hand as of April 30 total $1,200.

• d) Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage value, is $500 per month.

• e) The company has completed work for a client, but has not yet billed the $1,800 fee.

• f) Wages due to employees, but not yet paid, as of April 30 total $2,600.

General Journal St Retained General Income Impact on Requirement Trial Balance Balance Sheet Statement Ledger Earnings Income Use the drop-downs to select the accounts properly included on the income statement. The unadjusted or adjust balances will appear for each account, based on your selection. Adjusted LINKWORKS Income Statement For Month Ended April 30, 2017 Revenues $ 0 0 Expenses: 0 0 0 S Net income Trial Balance St Retained Earnings Adjusted LINKWORKS Balance Sheet April 30, 2017 ASSETS Current assets: Plant assets: 0 $ 0 LIABILITIES AND EQUITY Liabilities: 0 0 Equity: $ C оо Show moreV Adjusted Account affecting the: Impact on net income Adjusting entry related to: Income Statement Balance Sheet a) Rent b) Insurance c) Office supplies d) Depreciation e) Unbilled fees f) Unpaid wages 0 Impact on Income> Balance Sheet

Answer 1

1.

Linkworks Income Statement For the year ended April 30, 2017
Revenues
Service Revenue		$ 14,690
Less: Expenses
Wages Expense	$ 2,600
Office Supplies Expense	3,000
Insurance Expense	200
Rent Expense	750
Utilities Expense	435
Depreciation Expense	500	7,485
Net Income		$ 7,205

2.

Linkworks Statement of Retained Earnings For the month ended April 30, 2017
Balance, April 1	$ 0
Add: Net Income	7,205
Less: Dividends	(5,500)
Balance, April 30	$ 1,705

3.

Linkworks Balance Sheet April 30, 2017
ASSETS
Current Assets	$	$
Cash	59,465
Accounts Receivable	6,290
Office Supplies	1,200
Prepaid Rent	8,250
Prepaid Insurance	2,200
Total Current Assets		77,405
Plant Assets
Equipment, at cost	34,000
Less: Accumulated Depreciation	(500)	33,500
Total Assets		$ 110,905
LIABILITIES & EQUITY
Current Liabilities	$	$
Accounts Payable	600
Wages Payable	2,600
Total Current Liabilities		3,200
Long Term Liabilities		Nil
Total Liabilities		3,200
Equity
Common Stock	106,000
Retained Earnings	1,705
Total Equity		107,705
Total Liabilities and Equity		$ 110,905

4.  

	Account affecting the
Adjusting Entry Relating to:	Income Statement	Balance Sheet	Impact on Net Income
a. Rent	Rent Expense	Prepaid Rent	Decrease
b. Insurance	Insurance Expense	Prepaid Insurance	Decrease
c.Office Supplies	Office Supplies Expense	Office Supplies	Decrease
d. Depreciation	Depreciation Expense	Accumulated Depreciation	Decrease
e.Unbilled Fees	Service Revenue	Accounts Receivable	Increase
f. Unpaid Wages	Wages Expense	Wages Payable	Decrease