On January 1, 2025, Norma Smith and Grant Wood formed a computer sales and service company in Soapsville, Arkansas, by investing
$90,100 cash. The new company, Crane Sales and Service, has the following transactions during January.
1.
Pays $15,000 in advance for 3 months' rent of office, showroom, and repair space.
2.
Purchases 41 personal computers at a cost of $1,600 each, 7 graphics computers at a cost of $2,600 each, and 26 printers at a
cost of $400 each, paying cash upon delivery.
3.
Sales, repair, and office employees earn $12,700 in salaries and wages during January, of which $3,100 was still payable at the
end of January.
4.
Sells 31 personal computers at $2,650 each, 5 graphics computers for $3,700 each, and 16 printers for $600 each; $75,100 is
received in cash in January, and $35,150 is sold on a deferred payment basis.
5.
Other operating expenses of $8,500 are incurred and paid for during January; $2,100 of incurred expenses are payable at
January 31.
(a)
Using the transaction data above, prepare (1) a cash-basis income statement and (2) an accrual-basis income statement for the
month of January. (Enter loss using either a negative sign preceding the number, e.g. -45 or parentheses e.g. (45).)
CRANE SALES AND SERVICE
Income Statement
For the Month Ended January 31. 2025
