Reference no: EM132842416

Question - Gordon Company, a new tax service, began operations on January 1. During the month they had the following transactions:

January 2 Sold 50,000 shares of stock for $90,000 cash.

January 4 Purchased a one-year comprehensive insurance policy for $1,200.

January 8 Computer equipment is purchased for $25,000. A cash payment of $10,000 is made with the remainder on a note.

January 15 Customers are billed for service for the first half of the month. The total of $6,000 is due in 10 days.

January 17 Wages of $2,000 for the first half of January are paid.

January 24 Received $6,000 from customers for services provided during the first half of the month.

January 31 Wages of $2,000 for the second half of the month are accrued and will be paid on February 7.

January 31 Sent bills totaling $8,250 to customers for services provided during the second half of the month and due in 10 days.

REQUIRED -

1. Prepare journal entries to record the January transactions (January 1-24).

2. Prepare journal entries to record the adjusting entries for insurance, wages (given above), and accrued revenue (given above) on January 31.

3. Prepare the multi-step income statement.

4. Prepare the balance sheet.