Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed belowj Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations May 1 G. Gram invested $40,500 cash in the company in exchange for its common stock. 1 The company rented a furnished office and paid $2,300 cash for May's rent 3 The company purchased $1,940 of office equipment on credit. 5 The company paid $730 cash for this month's cleaning services. 8 The company provided consulting services for a client and immediately collected $5,400 cash 12 The company provided $2,500 of consulting services for a client on credit 15 The company paid $770 cash for an assistant' s salary for the first half of this month. 20 The company received $2,500 cash payment for the services provided on May 12. 22 The company provided $4,000 of consulting services on credit 25 The company received $4,000 cash payment for the services provided on May 22. 26 The company paid $1,940 cash for the office equipment purchased on May 3 27 The company purchased $90 of office equipment on credit 28 The company paid $770 cash for an assistant's salary for the second half of this month 30 The company paid $300 cash for this month's telephone bill 30 The company paid $260 cash for this month's utilities 31 The company paid $1,800 cash in dividends to the owner (sole shareholder) 936

Explanation / Answer

Formula view

Income Statement Revenues Consulting services Revenue 11900 Less: Expenses: Rent Expense 2300 Cleaning Expense 730 Salaries Expense 1540 Telephone Expense 300 Utility expense 260 Total Expense 5130 Net Income 6770 Statement of Retained Earning Retained Earning, 1 May 0 Add: Net income 6770 Less: Dividend 1800 Retained Earnings 31 May 4970 Balance Sheet Assets Amount Liability Amount Cash 43530 Accounts Payable 90 Office Equipment 2030 Equity Accounts Receivable 0 Common Stock 40500 Retained Earning 4970 Total Equity 45470 Total Assets 45560 Total Liability and equity 45560 Cash flow Cash Flow from operating activities Cash Received from customers 11900 Cash Paid to employees -1540 Cash paid for rent -2300 Cash paid for cleaning -730 Telephone Expense -300 Utility expense -260 Cash flow from operations 6770 Cash flow from investing activities Cash paid for equipment -1940 Cash flow from investing activities -1940 Cash flow from financing activity Issue of common stock 40500 Dividend Paid -1800 Cash flow from financing activity 38700 Net cash flow during the period 43530 Add:Opening balance 0 Closing Balance 43530

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