Preparation of a proper income statement and balance sheet

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L&T is a company specialized in selling Phones. Its first month of operation is January 2016 in which the following transactions were undertaken

Jan1: issue capital stock of £330,000in cash
Jan2: Borrowed £230,000 from the bank at an annual interest rate of 5.5%
Jan3: Purchased 100 Phones at £500 per Phone
Jan4: Purchased Building at £60,000. The company paid £25,000 and agreed to pay the rest on a note payable
Jan8: Paid rent for the month of January at £1650
Jan15: Received investment of £160,000 from the owners
Jan20: Sold 47 phones at £1150 each
Jan24: Purchased Furniture at £27,000. The company paid £12000 and agreed to pay the rest on account
Jan27: Paid salaries at £5000
Jan29: Paid one month of interest
Jan 30: Paid dividends of £900
Jan 31: Paid income taxes at 11.3%

Required:

Problem 1: Preparation of a proper Income Statement and Balance sheet for L&T

Reference no: EM132769483

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