Question

During January 2018, the first month of operations, a consulting firm had following transactions:

1. Issued common stock to owners in exchange for $30,000 cash.

2. Purchased $7,500 of equipment, paying $2,250 cash and signing a promissory note for $5,250.

3. Received $13,500 in cash for consulting services performed in January.

4. Purchased $2,250 of supplies on account; all of the supplies were used in January.

5. Provided consulting services on account in the amount of $24,000.

6. Paid $1,125 on account.

7. Paid $4,500 to employees for work performed during January.

8. Received a bill for utilities for January of $5,100; the bill remains unpaid.

What is the total expenses that will be reported on the income statement for the month ended January 31?

A. 5625

B. 11850

C. 6750

D. 12975

Answer 1

Event 11 1 - - ! N uw Income Summary Revenue Expenses Net Income $ $ $ $ $ $ $ 13,500 $ $ 13,500 $ $ 2,250 = $ 2,250 $ 24,000 $ $ 24,000 $ $ = $ $ $ 4,500 = $ 4,500 $ $ 5,100 = $ 5,100 $ 37,500 $ 11,850 = $ 25,650 - = 6 - 7 8 Total - Total Expenses reported on the income statement for the month ended January 31 is $11,850