Using the trial balance prepared for Binbutti Engineering in Part 4 of Problem 2-9A, prepare an income statement and statement of changes in equity for the three months ended July 31, 2014, and a balance sheet at July 31, 2014.
In problem 2-9A, Binbutti Engineering, a sole proprietorship, completed the following transactions during July 2014, the third month of operations:
July 1 Bishr Binbutti, the owner, invested $300,000 cash, office equipment with a value of $12,000, and $90,000 of drafting equipment in the business.
2 Purchased land for an office. The land was worth $108,000, which was paid with $10,800 cash and a long-term note payable for $97,200.
3 Purchased a portable building with $150,000 cash and moved it onto the land.
5 Paid $12,000 cash for the premiums on two one-year insurance policies.
7 Completed and delivered a set of plans for a client and collected $1,400 cash.
9 Purchased additional drafting equipment for $45,000. Paid $21,000 cash and signed a long-term note payable for the $24,000 balance.
10 Completed $4,000 of engineering services for a client. This amount is to be paid within 30 days.
12 Purchased $4,500 of additional office equipment on credit.
15 Completed engineering services for $7,000 on credit.
16 Received a bill for rent on equipment that was used on a completed job. The $1 3,800 rent must be paid within 30 days.
17 Collected $400 from the client of July 10.
19 Paid $12,000 wages to the drafting assistants.
22 Paid the account payable created on July 12.
25 Paid $1,350 cash for some repairs to an item of drafting equipment.
26 Binbutti withdrew $800 cash from the business for personal use.
30 Paid $12,000 wages to the drafting assistants.
31 Paid $6,000 cash for advertising in the local newspaper during July.