Question

Required information Problem 1-7A Analyzing transactions and preparing financial statements LO C4, P1, P2 (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 $42,500 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 $1,930 of office equipment on credit. 5 The company paid $780 cash for this month's cleaning services. 8 The company provided consulting services for a client and immediately collected $5,600 cash. 12 The company provided $2,800 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 $2,800 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 $1,930 cash for the office equipment purchased on May 3. 27 The company purchased $80 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 $300 cash for this month's telephone bill. 30 The company paid $300 cash for this month's utilities. 31 The company paid $1,500 cash in dividends to the owner (sole shareholder).

Answer 1

Income Statement of The Gram co for the month ended31 May

Date	Expenses	Amount	Date	Revenue	Amount
May 1	Rent Paid	2200	May8	Consultancy Income	5600
May 5	Cleaning Services	780	May 12	Consultancy Income	2800
May 15	Salary Assistance	740	May 22	Consultancy Income	3600
May 28	Salary Assistance	740
May 30	Telephone Expenses	300
May 30	Utilities	300
	Profit	6940
	Total	12000		Total	12000

Statement of Retained Earnings of The Gram Co for the Month ended May 31

Date	Particulars	Amount
May 1	Retained Earnings	0
May 31	Profit	6940
May 31	Dividend Paid	1500
May 31	Balance of Retained Earnings	5440

Balance Sheet of The Gram Co as on May 31

Assets	Amount	Equity and Liabilities	Amount
Fixed Assets		Equity
Office Equipments	3940	Capital-Gabi Gram	42500
		Retained Earnings	5440
Current Assets
Cash-in-Hand	44080
		Liabilities
		Sundry Creditors	80
Total	48020	Total	48020

Statement of Cash Flows of The Gram Co for the month ended May 31

Particulars	Amount	Amount
Cash Flow from Operating Activties
Profit from Income Statement	6940	6940 (A)
Cash Flow from Investing Activities
Purchase of Office Equipments	(3860)	(3860) (B)
Cash Flow from Financing Activities
Capital Introuced by Gabu Gram	42500
Dividend Paid	(1500)	41000 (C)
Net Cash Flow (A)+(B)+(C)		44080
Cash as on May 1		0
Cash as on May 31		44080