Chapter 1, Problem 1.6P

Income Statement and Balance Sheet

Green Bay Corporation began business in July 2016 as a commercial fishing operation and a passenger service between islands. Shares of stock were issued to the owners in exchange for cash. Boats were purchased by making a down payment in cash and signing a note payable for the balance. Fish are sold to local restaurants on open account, and customers are given 15 days to pay their account. Cash fares are collected for all passenger traffic. Rent for the dock facilities is paid at the beginning of each month. Salaries and wages are paid at the end of the month. The following amounts are from the records of Green Bay Corporation at the end of its first month of operations:

Required

1. Prepare an income statement for the month ended July 31, 2016.
2. Prepare a balance sheet at July 31, 2016.
3. What information would you need about Notes Payable to fully assess Green Bay’s long-term viability? Explain your answer.