Question

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 $44,500 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 company purchased $1,860 of office equipment on credit.
		5		The company paid $800 cash for this month’s cleaning services.
		8		The company provided consulting services for a client and immediately collected $5,500 cash.
		12		The company provided $2,800 of consulting services for a client on credit.
		15		The company paid $750 cash for an assistant’s salary for the first half of this month.
		20		The company received $2,800 cash payment for the services provided on May 12.
		22		The company provided $3,600 of consulting services on credit.
		25		The company received $3,600 cash payment for the services provided on May 22.
		26		The company paid $1,860 cash for the office equipment purchased on May 3.
		27		The company purchased $80 of office equipment on credit.
		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 $290 cash for this month’s utilities.
		31		The company paid $1,900 cash in dividends to the owner (sole shareholder).

2.1. Prepare the income statement for May.

2.2. Prepare the statement of retained earnings for May.

2.3. Prepare the balance sheet as of May 31.

3. Prepare the statement of cash flows for the month of May.

Answer 1