Wilson Marketing Consulting, a proprietorship owned by Lin Wilson, was started on January 1, 2016, with an investment of $50,000 cash. The company prepares marketing plans for clients. It has been operating for one year. Business was quite slow in the first year of operations but has steadily increased. Wilson has made additional investments of $30,000 but has not made any withdrawals. The general ledger showed the following balances as of December 31, 2016:

Cash ........................................................................ $ 25,000

Accounts Receivable ................................................. 30,000

Software .....................................................................21,000

Office Furniture ..........................................................15,000

Computer Equipment .................................................32,000

Accounts Payable .......................................................18,000

L. Wilson, Capital ....................................................105,000

The following transactions took place during the month of January 2017:

Jan. 2 Wilson invested $20,000 in the business.

2 The business paid $4,000 for the month's rent on the office space.

4 The business signed a lease for the rental of additional office space at a cost of $3,500 per month. The lease is effective February 1. The business will pay the first month's rent in February.

6 The business developed a marketing plan for Banting Ltd. and received $10,000 now plus additional $7,000 payments to be received on the 15th of the month for the next three months.

10 The business paid $1,000 to a courier service.

12 Wilson signed an agreement to provide a marketing plan to Smith Inc. for $15,000 to be paid upon completion of the work.

14 The company purchased $5,000 of software that will be required for the Smith assignment. The company paid $3,000 and promised to pay the balance by the end of the month.

15 The company received $7,000 as the monthly payment from Banting Ltd. From January 6.

18 The company purchased computer equipment for $10,000 by paying $4,000 cash with the balance due in 60 days.

23 The company completed a marketing plan for Salem Ltd., which promised to pay $12,000 by the end of the month.

29 The company paid the balance owing for the software purchased on January 14.

31 Employees of Wilson Marketing Consulting are paid at the end of each month.

The total wages expense for January was $10,000.

31 Wilson Marketing Consulting paid the utilities expense for January, $1,000.

31 Lin Wilson withdrew $5,000 for personal use.

Required

1. What is the total net income earned by the business over the period of January 1, 2016, to December 31, 2016?

2. Analyze the effects of the January 2017 transactions on the accounting equation of Wilson Marketing Consulting. Be sure to include the account balances from December 31, 2016.

3. Prepare the income statement for Wilson Marketing Consulting for the month ended January 31, 2017.

4. Prepare the statement of owner's equity for Wilson Marketing Consulting for the month ended January 31, 2017.

5. Prepare the balance sheet for Wilson Marketing Consulting at January 31, 2017.

6. Lin Wilson has expressed concern that although the business seems to be profitable and growing, she constantly seems to be investing additional money into it and has been unable to make many withdrawals for the work she has put into it. Prepare a reply to her concerns.