On Jan 1, 2012, William Kelly started Kelly’s Computer Service, Inc. by incorporating the company and investing $10, 000 in exchange for company stock. On Jan. 3, the company borrowed $10, 000 from another investor and executed a Note payable with the principal and interest to be due in one year. On Jan 5, the company purchased 12, 000 of equipment for cash. On Jan. 8, Kelly’s rendered service to his first corporate client and earned $2, 500 in cash. On Jan 12, Kelly’s incurred repair expense of $1, 200 and promised to pay the repair contractor the following month. On Jan. 18, Kelly’s rendered service to a new client in the amount of $6, 000 “on account, ” (the client promised to pay the following month). At the end of January, Kelly’s Computer Service, Inc. paid a dividend of 1, 000 to William Kelly, the sole shareholder. Please prepare an income statement for the month of Jan statement of retained earnings for the month of January, and a balance sheet at Jan. 31, 2012.
