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CH 13

This is a business start-up and these are the first activities of the business.

Period from January 1 - January 30

1. Kamal invested $25,000 into her company's bank account to start the business.

2. Kamal bought $5,000 of inventory using cash for payment.

3. Kamal bought equipment needed for the business in the amount of $10,000 which she paid for half in cash and half as an outstanding loan to be paid back interest-free over 6 months.

Build a balance sheet reflecting the events of January.

Balance Sheet

Total Assets:

Total Liabilities & Owners Equity:

Period between February 1-February 28

4. Kamal had sales of $12,000 for the month: $6,000 paid in cash and $6,000 on credit.

5. Kamal paid $3,000 in cash to the company she bought the equipment from against the loan she took out in January.

6. Kamal checked her inventory at the end of the month and saw there was $2,000 remaining in stock.

7. Kamal recognized a depreciation expense of $1000 against the equipment she owned.

8. Kamal paid herself a salary of $3,000 to pay for a much-needed vacation.

2. Build a balance sheet and income statement reflecting the events of February.

Balance Sheet

Total Assets:

Total Liabilities & Owners Equity:

Income Statement

Profit (Loss):

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