At the beginning of the summer, Humphrey Nelson was looking for a way to earn money to pay for his college tuition in the fall. Hedecided to start a lawn service business in his neighborhood. To get the business started, Humphrey used $6,800 from his savingsaccount to open a checking account for his new business, Elegant Lawn Care. He purchased two used power mowers and variouslawn care tools for $2,000, and paid $3,600 for a used truck to transport the mowers.Several of his neighbors hired him to cut their grass on a weekly basis. He sent these customers monthly bills. By the end of thesummer, they had paid him $5,600 in cash and owed him another $2,800. Humphrey also cut grass on an as-needed basis for otherneighbors, who paid him $4,800.During the summer, Humphrey spent $1,200 for gasoline for the truck and mowers. He paid $4,400 to a friend who helped him onseveral occasions. An advertisement in the local paper cost $1,200. Now, at the end of the summer, Humphrey is concerned becausehe has only $4,800 left in his checking account. He says, "I worked hard all summer and have only $4,800 to show for it. It would havebeen better to leave the money in the bank."Required:Prepare an income statement, a statement of owner's equity (for the three month period ended August 31, 20X1), and a balance sheet(dated August 31, 20X1) for Elegant Lawn Care.Complete this question by entering your answers in the tabs below.IncomeStatement ofStatement Owners Equity Balance SheetPrepare a statement of owner's equity (for the three month period ended August 31, 20X1) for Elegant Lawn Care.ELEGANT LAWN CAREStatement of Owner's EquityThree Months Ended August 31, 20X1Humphrey Nelson, Capital, June 1, 20X1Net income for June-AugustHumphrey Nelson, Capital, August 31, 20X1$< Income StatementBalance Sheet >

Trial Balance Particulars Debit Credit Cash $ 4,800 Accounts Recievable $ 2,800…

wn service business in his neighborhood. To get the business started, Humphrey used hecking account for his new business, Elegant Lawn Care. He purchased two used po $2,000, and paid $3,600 for a used truck to transport the mowers. bors hired him to cut their grass on a weekly basis. He sent these customers monthly aid him $5,600 in cash and owed him another $2,800. Humphrey also cut grass on an d him $4,800. Humphrey spent $1,200 for gasoline for the truck and mowers. He paid $4,400 to a fri An advertisement in the local paper cost $1,200. Now, at the end of the summer, Hump left in his checking account. He says, "I worked hard all summer and have only $4,800 the money in the bank." statement, a statement of owner's equity (for the three month period ended August 31,

wn service business in his neighborhood. To get the business started, Humphrey used hecking account for his new business, Elegant Lawn Care. He purchased two used po $2,000, and paid $3,600 for a used truck to transport the mowers. bors hired him to cut their grass on a weekly basis. He sent these customers monthly aid him $5,600 in cash and owed him another $2,800. Humphrey also cut grass on an d him $4,800. Humphrey spent $1,200 for gasoline for the truck and mowers. He paid $4,400 to a fri An advertisement in the local paper cost $1,200. Now, at the end of the summer, Hump left in his checking account. He says, "I worked hard all summer and have only $4,800 the money in the bank." statement, a statement of owner's equity (for the three month period ended August 31,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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