May 3 The company purchased $1,940 of equipment on credit. May 5 The company paid $730 cash for this month's cleaning services. May 8 The company provided consulting services for a client and immediately collected $5,600 cash. May 12 The company provided $2,800 of consulting services for a client on credit. May 15 The company paid $760 cash for an assistant's salary for the first half of this month. May 20 The company received $2,800 cash payment for the services provided on May 12. May 22 The company provided $3,700 of consulting services on credit. May 25 The company received $3,700 cash payment for the services provided on May 22. May 26 The company paid $1,940 cash for the equipment purchased on May 3. May 27 The company purchased $75 of equipment on credit. May 28 The company paid $760 cash for an assistant's salary for the second half of this month. May 30 The company paid $400 cash for this month's telephone bill. May 30 The company paid $250 cash for this month's utilities. May 31 The company paid $2,000 cash in dividends to the owner (sole shareholder). Problem 1-7A (Algo) Part 2 and 3 2-a. Prepare the income statement for May. 2-b. Prepare the statement of retained earnings for May. 2-c. Prepare the balance sheet for May 31.
May 3 The company purchased $1,940 of equipment on credit. May 5 The company paid $730 cash for this month's cleaning services. May 8 The company provided consulting services for a client and immediately collected $5,600 cash. May 12 The company provided $2,800 of consulting services for a client on credit. May 15 The company paid $760 cash for an assistant's salary for the first half of this month. May 20 The company received $2,800 cash payment for the services provided on May 12. May 22 The company provided $3,700 of consulting services on credit. May 25 The company received $3,700 cash payment for the services provided on May 22. May 26 The company paid $1,940 cash for the equipment purchased on May 3. May 27 The company purchased $75 of equipment on credit. May 28 The company paid $760 cash for an assistant's salary for the second half of this month. May 30 The company paid $400 cash for this month's telephone bill. May 30 The company paid $250 cash for this month's utilities. May 31 The company paid $2,000 cash in dividends to the owner (sole shareholder). Problem 1-7A (Algo) Part 2 and 3 2-a. Prepare the income statement for May. 2-b. Prepare the statement of retained earnings for May. 2-c. Prepare the balance sheet for May 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
9
Transcribed Image Text:Gabi Gram started The Gram Company, a new business that began operations on May 1. The Gram Company 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.
May 1 The company rented a furnished office and paid $2,300 cash for May's rent.
May 3 The company purchased $1,940 of equipment on credit.
May 5 The company paid $730 cash for this month's cleaning services.
May 8 The company provided consulting services for a client and immediately collected $5,600 cash.
May 12 The company provided $2,800 of consulting services for a client on credit.
May 15 The company paid $760 cash for an assistant's salary for the first half of this month.
May 20 The company received $2,800 cash payment for the services provided on May 12.
May 22 The company provided $3,700 of consulting services on credit.
May 25 The company received $3,700 cash payment for the services provided on May 22.
May 26 The company paid $1,940 cash for the equipment purchased on May 3.
May 27 The company purchased $75 of equipment on credit.
May 28 The company paid $760 cash for an assistant's salary for the second half of this month.
May 30 The company paid $400 cash for this month's telephone bill.
May 30 The company paid $250 cash for this month's utilities.
May 31 The company paid $2,000 cash in dividends to the owner (sole shareholder).
Problem 1-7A (Algo) Part 2 and 3
2-a. Prepare the income statement for May.
2-b. Prepare the statement of retained earnings for May.
2-c. Prepare the balance sheet for May 31.
3. Prepare the statement of cash flows for May.
Complete this question by entering your answers in the tabs below.
Required 2A
Required 2B Required 2C Required 3
Prepare the statement of retained earnings for May.
THE GRAM COMPANY
Statement of Retained Earnings
For Month Ended May 31
Retained earnings, May 1
Add: Net income
Less: Dividends
Retained earnings, May 31
$
6,900
6,900
(2,000)
4,900
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