Question 1: Robert and Chip organized Chipper Corporation on January 1, 2008. Each of these owners invested $100,000 cash and received shares of stock. Below are selected transactions that were completed during January 2008:
(1) Owner's invested $100,000 each to start the business.
(2) Prepaid three (3) months rent for $15,000 ($5,000 each month).
(3) Purchased equipment by signing a $75,000 note payable for $50,000 and paying the remainder in cash.
(4) Purchased two service vehicles for $24,000 each, paid $20,000 cash.
(5) Purchased $1,000 of supplies on account.
(6) Sales revenue on account was $85,000.
(7) Paid expenses of $48,000.
(8) Collected $42,000 from customers on account.
(9) Paid $2,000 on the note payable for the equipment and $1000 for the note payable for the service vehicles.
Record each transaction in journal form and post to the appropriate accounts in the ledger. Prepare a Trial Balance for January 31, 2008.
Question 2: The ABC Company recorded revenues during the year 2008 of $209,000. The Company had balances in the following accounts:
Rent Expense $48,000
Wages Payable 22,000
Gain on Equipment Sale 15,000
Operating Expense 85,000
Prepaid Rent 18,000
Wage Expense 70,000
Unearned Revenue 11,500
Calculate the ABC Company Net Income (Net Loss) for 2008. Provide all supporting calculations.