Help Required information The following information applies to the questions dis
ID: 2333329 • Letter: H
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Help Required information The following information applies to the questions displayed below 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, 000 cash in the company in exchange for its common stock 1 The company rented a furnished office and paid $2, 200 cash for May's rent 3 The compan 5 The company paid $750 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 clie 15 The company paid $750 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 $3, 200 of consulting services on credit 25 The company received $3,200 cash payment for the services provided on May 22 26 The company paid $1, 890 cash for the office equipment purchased on May 3. 27 The company purchased $80 of advertising in this month's (May) local paper on credit; cash payment y purchased $1,890 of office equipment on credit. nt on credit is due June 1 28 The company paid $750 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 $280 cash for this month's utilities. 31 The company paid $1,400 cash in dividends to the owner (sole shareholder). Prepare income statement for May. ome Statement K Prey 5 of 5Next>Explanation / Answer
Income Statement :-
Revenues:
Consulting Service Revenue
(5400 + 2500 + 3200)
11100
Expenses:
Rent Exp
2200
Cleaning Exp
750
Salaries Exp (750 + 750)
1500
Telephone Exp
300
Utilities Exp
280
Advertising Exp
80
Total Exp
5110
Net Income
5990
Statement of Retained Earnings :-
Retained Earnings , May 1
0
Add: Net Income
5990
5990
Less Dividends
(1400)
Retained Earnings , May 31
4590
Balance sheet :-
Assets
Liabilities
Cash
(40000-2200-750+5400-750+2500+3200-1890-750-300-280-1400)
42780
A/c Payable
80
Office Equipment
1890
Equity
Common Stock
40000
Retained Earnings
4590
Total Equity
44590
Total Assets
44670
Total Liab & Equity
44670
Cash Flow Statement :-
Cash Flow From Operating Activities :-
Consulting service revenue
11100
Cash Paid for cleaning
(750)
Cash Paid for rent
(2200)
Cash Paid for telephone
(300)
Cash Paid for utilities
(280)
Cash Paid to employees
(1500)
Cash Flow From Operating Activities (A)
6070
Cash Flow From Investing Activities :-
Purchase of Equipment
(1890)
Cash Flow From Investing Activities (B)
(1890)
Cash Flow From Financing Activities :-
Common Stock Issue
40000
Dividend paid
(1400)
Cash Flow From Financing Activities (C)
38600
(A+B+C)
42780
(+) Beginning cash Balance
0
Ending Cash Balance
42780
Revenues:
Consulting Service Revenue
(5400 + 2500 + 3200)
11100
Expenses:
Rent Exp
2200
Cleaning Exp
750
Salaries Exp (750 + 750)
1500
Telephone Exp
300
Utilities Exp
280
Advertising Exp
80
Total Exp
5110
Net Income
5990
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