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Question

On March 1, Kate Harbour started Skin Care Co. a company that provides individual skin car treatment to clients. She invested $27,200 cash in the business. Listed below alphabetically are the assets and liabilities of the company at March 31, and the revenues and expenses for the month of March.

Accounts Payable        $1,200             

Gas & Oil expense    $ 800

Accounts Receivable      4,000           

  Notes payable       13,000

Advertising Expense         500            

 Service revenue      6,500

Cash                  12,000           

  Supplies expense      1,200

Supplies                 2,400           

  Utilities expense         300

Equipment              25,000

 

Kate invested $5,000 additional cash and withdrew $1,500 in cash for personal use during the month of March.

Instructions: Prepare an Income Statement, Statement of Owner’s Equity for the month of March, and a Balance Sheet at March 31, 2020.

Answer 1

Kate Harbour

Income Statement

For the Month of March 31, 2020.

REVENUE

  Service revenue      6,500

EXPENSES

Gas & Oil expense     $ 800

Supplies expense       1,200

Utilities expense           300

Advertising Expense        500   

Total Expenses 2800

NET INCOME 3700

Kate Harbour

Statement of owners Equity

For the Month of March 31, 2020.

Kate Harbour, Capital on March 1 $27,200

Investment during the month 5000

Net Income 3700

SUBTOTAL 35,900

Withdrawal During the year 1500

Kate Harbour, Capital on March 31 34,400