extra practice before quiz

extra practice before quiz - Computing Solutions began...

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The following transactions occurred during the first month of operations. July 1 Received capital contribution of $5,000 from principal owner, Ray Charles, in exchange for shares of stock. July 1 Signed a one-year lease and paid one month’s rent in cash in the amount of $800. July 8 Purchased two computers on account for $2,500 each. The company has 45 days to pay for the computers. July 8 Obtained a business license from the city of Waynesboro and paid a $300 fee. July 10 Purchased $500 miscellaneous supplies for cash. All supplies will be used during July. July 15 Purchased an ad in the local newspaper for $125. July 20 Consulted with first customer and earned $1,000 in consulting revenue on account. July 21 Consulted with second customer and earned $800 in consulting revenue in cash. Required: 1) Prepare a table to summarize the transactions as they affect the accounting equation. 2) Prepare an income statement for the month ending July 31, 2005.
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