Solve only 2 ii,v and vii 2. BetterToKnow Testing Lab After several months of pl

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Solve only 2 ii,v and vii

2. BetterToKnow Testing Lab After several months of planning, Denise Murphy started a structural lab-test business for the civil engineering and construction industries called BetterToKnow. The following events occurred during its first month Murphy started the firm, investing $3,000 cash and $15,000 of equipment BetterToKnow paid $500 cash to rent space in a strip mall for the current month BetterToKnow paid $500 cash for furniture for the shop The company obtained S1,200 of equipment for the shop and received an invoice for this purchase. BetterToKnow opened for business. Cash received from consulting services (part of their main business) was $850 The firm provided $100 of lab-test services on account (IE: it issued the customer an invoice) a. b. c. d. e. f. g. The firm paid S150 cash to an assistant for working during the grand opening h. The firm received a $100 check for the lab-test services previously rendered on account. i. Cash received from additional consulting services was $930 j. It paid a $400 on the invoice it received in d) above k. The firm paid $1,000 cash dividends to Murphy Global Page 273 Find i. Create a Transaction Table for the above events. You may wish to use some or all of the following accounts: Cash; Accounts Receivable; Furniture; PPE; Accounts Payable; Paid in Capital; Dividends; Revenues; and Expenses. ii. Prepare a set of Journal entries, using the dr/cr sign convention ii. Prepare an Income Statement for this period. iv. Prepare a direct method Cash Flow Statement. v. Prepare a Balance Sheet as of the end of the period vi. Prepare an Owners Equity Statement. vii. During the above firm's 2nd month of operations, Cash increases by $1,000, Revenue increases by $2,000, and Accounts Receivable increases by $1,000. Also, Accounts Payable increases by $500 and Rent Expense of S500 is incurred (but not paid). Nothing else happens in the month Create a Balance Sheet for the firm's 2nd month of operations

Explanation / Answer

Formula sheet

43 Income Statement 44 Revenue $1,880 45 Expenses 46 Rent Expense $500 47 Salaries Expense $150 48 Total Expense $650 49 Net Income $1,230 50 Dividends $1,000 51 Income to Retained Earnings $230 52 53 54 v) 55 Balance Sheet 56 Cash $2,330 57 Accounts Receivable $0 58 Furniture $500 59 PPE $16,200 60 Total Assets $19,030 61 62 Accounts Payable $800 63 Paid in Capital $18,000 64 Dividends ($1,000) 65 Retained Earnings $230 66 Total Liabilities and Equity $18,030 67

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