Question

Required information (The following information applies to the questions displayed below.) During January 2015, the first month of operations, a consulting firm had following transactions: 1. Issued common stock to owners in exchange for $24,000 cash. 2. Purchased $6,000 of equipment, paying $1,200 cash and signing a promissory note for $4,800. 3. Received $10,800 in cash for consulting services performed in January. 4. Purchased $1,800 of supplies on account; all of the supplies were used in January. 5. Provided consulting services on account in the amount of $19,200. 6. Paid $900 on account. 7. Paid $3,600 to employees for work performed during January 8. Received a bill for utilities for January of $4,100; the bill remains unpaid.. What is subtotal of expenses that will be reported on the income statement for the month ended January 31?

Answer 1

Answer is $9500.

on Income statement Sub total of expenses that will be reported Amount Transaction expense No expence Nil 2. No expenses 3. No expenses 4 1800 supplies Nil 5. No expenses hil 6 No expenses 3600 7. wages to employees utilities 4100 9500

wortline wote Journal entries Cash 24000 Common Shoue 24000 [ No expense involved ② Equipment 6000 Cash 1260 Noles payable Notes payable 나 800 [ No expense involveed] this is asset purchase (3. cash 10800 losoo Service revenue [ This is revenue related entry) 14 1800 supplies on hand A Alwunts payable 1800 (Supplies on hand is Asset as doesn't have any effect on expense) Supplies 1800 supplies on hand (roo ( Supplies is an expense)

S Accounts recelvable 19200 19200 service revenue [ revenue related entry) Accounts payable 900 900 [ Repayment to Accounts payase, no effect on expense) cash cages 3600 cash 3600 [ wages is a expense] f atilines 4100 Accounts payable 4100 Cutlines is a expense)