Gerald Resler recently opened a financial consulting busin
Question and Solution
Gerald Resler recently opened a financial consulting business. Summary transactions for the month of June, his second month of operation, are provided below. 1. Cash collected from clients for consulting fees, $10,000. $1,500 of the $10,000 was for consulting fees earned in May, but received in June. 2. Consulting fees earned in June, but to be received in July, $2,000. 3. Supplies on hand at the beginning of June amounted to $500. All purchases of supplies are made on account. Supplies purchased during June, $1,000. At the end of June, $600 worth of supplies remained unused. 4. Paid cash on account to suppliers during June, $800. $200 of the $800 was for purchases of supplies made in May. 5. Wages paid to an assistant, $2,000. Of this $2,000, $300 had been earned in May. In addition, the assistant earned $500 in June, which will be paid next month. 6. Purchased a laptop. Paid $1,200 cash in June and will pay the balance of $1,200 in July. Gerald expects to use the laptop for two years at which time he expects that it will be obsolete and have a zero salvage value. REQUIRED Prepare income statements for the month of June using the modified cash and accrual bases.