Question

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. Gran 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 $1,920 of office equipment on credit. 5 The company paid $720 cash for this month's cleaning services. B The company provided consulting services for a client and immediately collected $5,700 cash. 12 The company provided $2,900 of consulting services for a client on credit. 15 The company paid $740 cash for an assistant's salary for the first half of this month. 20 The company received $2,900 cash payment for the services provided on May 12. 22 The company provided $3,800 of consulting services on credit. 25 The company received $3,800 cash payment for the services provided on May 22. 26 The company paid $1,920 cash for the office equipment purchased on May 3. 27 The company purchased $75 of office equipment on credit. 28 The company paid $740 cash for an assistant's salary for the second half of this month. 30 The company paid $400 cash for this month's telephone bill. 30 The company paid $280 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. Complete this question by entering your answers in the tabs below Income Statement of Retained Balance Sheet Cash Flows Statement of Statement Earnings Prepare the income statement for May. THE GRAM CO

Answer 1

Books of The Gram Co.

Answer of part 2.1

Income Statement

For the month ended May 31, XXXX

Particulars	Amount in $
Revenue	12,400
Less: Operating Expenses
Office Rent	(2,200)
Cleaning Expenses	(720)
Assistant's Salary	(1,480)
Telephone Bill	(400)
Utilities	(280)
Net Income	7,320

Answer of Part 2.2

Statement of Retained Earnings

For the month ended May 31, XXXX

Particulars	Amount in $
Retained earnings at the beginning of the period (May 1, XXXX)	0
Add: Net Income	7,320
Less: Dividend	(1,900)
Retained earnings at the end of the period (May 31, XXXX)	5,420

Answer of Part 2.3

Balance Sheet

As on May 31, XXXX

Assets	Amount in $	Liabilities	Amount in $
Current Assets		Current Liabilities
Cash	48,000	Creditors (Equipment)	75
Property, Plant and Equipment		Shareholder's Equity
Office Equipment	1995	Common Stock	44,500
		Retained Earnings	5,420
Total of Assets	49,995	Total of Liabilities and Shareholder's Fund	49,995

Answer of Part 3

Cash Flow Statement

For the month ending May 31, XXXX

Operations	Amount in $
Cash Received from Customers	12,400
Cash Paid for
Rent	(2,200)
Cleaning Charges	(720)
Salary	(1,480)
Telephone Bill	(400)
Utilities	(280)
Net Cash Flow from Operation	7,320
Investing Activities
Cash paid for
Purchase of Equipment	(1,920)
Net Cash Flow from Investing Activities	(1,920)
Financing Activities
Cash Receipts from
Issuance of Stock	44,500
Net Cash Flow from Financing Activities	44.500