Question

Connie Young, an architect, opened an office on October 1, 2019. During the month, she completed the following transactions connected with her professional practice:
Transferred cash from a personal bank account to an account to be used for the business, $36,000.
Paid October rent for office and workroom, $2,400.
Purchased used automobile for $32,800, paying $7,800 cash and giving a note payable for the remainder.
Purchased office and computer equipment on account, $9,000.
Paid cash for supplies, $2,150.
Paid cash for annual insurance policies, $4,000.
Received cash from client for plans delivered, $12,200.
Paid cash for miscellaneous expenses, $815.
Paid cash to creditors on account, $4,500.
Paid $5,000 on note payable.
Received invoice for blueprint service, due in November, $2,890.
Recorded fees earned on plans delivered, payment to be received in November, $18,300.
Paid salary of assistants, $6,450.
Paid gas, oil, and repairs on automobile for October, $1,020.
4. Determine the net income or net loss for October.

Answer 1

Income Statement

Fee revenue earned ( 12,200+18,300)	30,500
Expenses:
Rent expense	-2,400
Insurance expense ( 4,000 x 1/12)	-333
Miscellaneous expense	-815
Blue print service expense	-2,890
Salary expense	-6,450
Gas, oil and repair	-1.020
Net Income	$17,611

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