Reference no: EM132557079

Question - Ida Chen and Frank Mulcati incorporated CM Architects Ltd and each contributed $5,000 by purchasing shares on April 1, 2016. The same day they borrowed $10,000 Frank's Father for two years at an annual interest rate of 5% which they paid at the end of each month. They also rented a furnished office for one year for $2,500 a month on April 1 and paid the last month's rent in advance. The rent included all utilities. They paid rent on time at the beginning of each month. They bought computing equipment for $4,000 paid by cheque at the start of their business. This equipment is estimated to last two years before being sold for an estimated $800 at the end of this time. Each month they paid $3,000 for a secretary/receptionist, $100 for supplies, $300 to a data processing centre and $200 for deliveries. Starting in April, client billings each respective month were $10,000, $12,000, $15,000, $14,000, $20,000 and $17,000. Clients always paid their bills next month by the end of the month except one client went bankrupt and the trustee in bankruptcy only paid them $1,000 in August out of the $4,000 that they had billed in June.

Create income statement for the six months ended September 30, 2016.