Modern Designer Company Is a Sole Proprietorship

Essay

Modern Designer Company is a sole proprietorship.The transactions for the first month of operations are as follows:
• On June 1,2019,the owner,Cindee Litfin,contributed $25,000 cash to the business in exchange for
capital.
• On June 2,the company rendered services to three clients on account with total revenues earned of $9,000.
• On June 5,the company incurred an advertising expense on four different web sites and promised to pay a total of $1,200 at a later date.
• On June 13,Modern Designer purchased $1,000 worth of office supplies for cash.(The supplies are not used by June 30.)
• On June 22,it received $2,000 on account from a client and deposited it into the business account.
• On June 23,it incurred $1,300 for a legal expense and paid cash.
• On June 30,Modern Designer made a payment of $500 to one of the web sites that it owed for advertising provided earlier in the month.
• No withdrawals were made during the month.
Required:
1.Prepare a transaction analysis of the transactions.Determine the effects of the transactions on the accounting equation.
2.Prepare an income statement and a statement of owner's equity for the month ended June 30,2019.
3.Prepare a balance sheet at June 30,2019.