Gabi Gram started The Gram Co., a new business that began operations on May 1. T

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. Gram invested $43,500 cash in the company in exchange for its common stock. 1 The company rented a furnished office and paid $2,400 cash for May’s rent. 3 The company purchased $1,940 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 $5,300 cash. 12 The company provided $2,400 of consulting services for a client on credit. 15 The company paid $790 cash for an assistant’s salary for the first half of this month. 20 The company received $2,400 cash payment for the services provided on May 12. 22 The company provided $3,200 of consulting services on credit. 25 The company received $3,200 cash payment for the services provided on May 22. 26 The company paid $1,940 cash for the office equipment purchased on May 3. 27 The company purchased $80 of office equipment on credit. 28 The company paid $790 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 $250 cash for this month’s utilities. 31 The company paid $1,600 cash in dividends to the owner (sole shareholder). 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 $43, 500 cash in the conpany in exchange for its conmon stock The company rented a furnished office and paid $2,400 cash for Mays 3 The company purchased $1,940 of office cquipment on credit S The company paid $780 cash for this month's cleaning services 8 The company provided consulting services for a client and inmediately 12 The company provided $2,400 of consulting services for a client on 15 The company paid 790 cash for an assintant's salary for the first half 20 The company received $2,400 cash payment for the services provided on collected $5, 300 cash credit of this month May 12 22 The company provided $3,200 of consulting services on credit 25 The company received $3,200 cash payment for the services provided on May 22 26 The company paid $1,940 cash for the office equipnent purchased on Hay 27 The company purchased $80 of office equipment on credit 28 The company paid 790 cash for an assintant'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 $250 cash for this month's utilities 31 The company paid $1,600 cash in dividends to the owner (soloe 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 State Prepare the income statement for May Balance State Sheetof Cash GRAM Income Statement For Month Ended May 31 Total expenses Income Statement Statement of Retained Earnings>

Explanation / Answer

Answers

Date

Cash

Accounts receivables

Prepaid Rent

Office Equipment

Accounts Payable

Common Stock

Consulting Services Revenues

Expenses

Net Income (Loss)

Retained earnings

May-01

$                  43,500.00

$              43,500.00

$                    -  

May-01

$                  (2,400.00)

$        2,400.00

$    (2,400.00)

May-03

$                1,940.00

$            1,940.00

$                    -  

May-05

$                      (780.00)

$            780.00

$        (780.00)

May-08

$                    5,300.00

$                   5,300.00

$       5,300.00

May-12

$                  2,400.00

$                   2,400.00

$       2,400.00

May-15

$                      (790.00)

$            790.00

$        (790.00)

May-20

$                    2,400.00

$                (2,400.00)

$                    -  

May-22

$                  3,200.00

$                   3,200.00

$       3,200.00

May-25

$                    3,200.00

$                (3,200.00)

$                    -  

May-26

$                 (1,940.00)

$          (1,940.00)

$                    -  

May-27

$                      80.00

$                  80.00

$                    -  

May-28

$                      (790.00)

$            790.00

$        (790.00)

May-30

$                      (300.00)

$            300.00

$        (300.00)

May-30

$                      (250.00)

$            250.00

$        (250.00)

May-31

$                  (1,600.00)

$                    -  

$    (1,600.00)

Total

$                  45,550.00

$                               -  

$                          -  

$                2,020.00

$                  80.00

$              43,500.00

$                 10,900.00

$        5,310.00

$       5,590.00

$    (1,600.00)

Net Income Adjustments

$    (5,590.00)

$      5,590.00

Final Balances for Balance Sheet

$                  45,550.00

$                               -  

$                          -  

$               2,020.00

$                  80.00

$              43,500.00

$                 10,900.00

$        5,310.00

$                    -  

$      3,990.00

Income Statement

Revenues:

Consulting Revenues - 8 May

$                           5,300.00

Consulting Revenues - 12 May

$                           2,400.00

Consulting Revenues - 22 May

$                           3,200.00

OR

Consulting Service Revenue

[total of above]

$                         10,900.00

Expenses:

Rent Expenses - May 1

$                                               2,400.00

Cleaning expenses - May 5

$                                                   780.00

Salaries expenses - May 15

$                                                   790.00

Salaries expenses - May 28

$                                                   790.00

Telephone expenses - May 30

$                                                   300.00

Utilities expenses - May 30

$                                                   250.00

Total Expenses

$                           5,310.00

Net Income

$                          5,590.00

Statement of Retained Earnings

Retained Earnings, May 1

$                             -  

Add: Net Income

$                5,590.00

$                5,590.00

Less: Dividends

$                1,600.00

Retained Earnings, May 31

$                3,990.00

Assets

Liabilities

Cash

$                         45,550.00

Accounts Payable

$                          80.00

Accounts receivables

$                                       -  

Total Current Assets

$                         45,550.00

Equity

Common Stock

$                  43,500.00

Office Equipment

$                           2,020.00

Retained Earnings, May 31

$                    3,990.00

Total Equity

$                  47,490.00

Total Assets

$                         47,570.00

Total Liabilities & Equity

$                  47,570.00

Statement of Cash Flows

Cash flows from Operating Activities

Cash received from clients [2500 + 3200]

$                   5,600.00

Cash received from services

$                   5,300.00

Cash paid for cleaning expenses

$                    (780.00)

Cash paid for rent

$                 (2,400.00)

Cash paid for salaries

$                 (1,580.00)

Cash paid for telephone bills

$                    (300.00)

Cash paid for utilities

$                    (250.00)

Cash flows from Operating Activities

$                   5,590.00

Cash Flows from Investing Activities

Cash paid for purchase of office equipment

$                 (1,940.00)

Cash flow from Investing activities

$                 (1,940.00)

Cash Flows from Financing activities

Cash received from issuance of Common Stock

$                 43,500.00

Cash paid for dividends

$                 (1,600.00)

Cash flows from Financing activities

$                 41,900.00

Increase (Decrease) in Cash

$                 45,550.00

Cash at beginning

$                                -  

Cash at end

$                 45,550.00

Date

Cash

Accounts receivables

Prepaid Rent

Office Equipment

Accounts Payable

Common Stock

Consulting Services Revenues

Expenses

Net Income (Loss)

Retained earnings

May-01

$                  43,500.00

$              43,500.00

$                    -  

May-01

$                  (2,400.00)

$        2,400.00

$    (2,400.00)

May-03

$                1,940.00

$            1,940.00

$                    -  

May-05

$                      (780.00)

$            780.00

$        (780.00)

May-08

$                    5,300.00

$                   5,300.00

$       5,300.00

May-12

$                  2,400.00

$                   2,400.00

$       2,400.00

May-15

$                      (790.00)

$            790.00

$        (790.00)

May-20

$                    2,400.00

$                (2,400.00)

$                    -  

May-22

$                  3,200.00

$                   3,200.00

$       3,200.00

May-25

$                    3,200.00

$                (3,200.00)

$                    -  

May-26

$                 (1,940.00)

$          (1,940.00)

$                    -  

May-27

$                      80.00

$                  80.00

$                    -  

May-28

$                      (790.00)

$            790.00

$        (790.00)

May-30

$                      (300.00)

$            300.00

$        (300.00)

May-30

$                      (250.00)

$            250.00

$        (250.00)

May-31

$                  (1,600.00)

$                    -  

$    (1,600.00)

Total

$                  45,550.00

$                               -  

$                          -  

$                2,020.00

$                  80.00

$              43,500.00

$                 10,900.00

$        5,310.00

$       5,590.00

$    (1,600.00)

Net Income Adjustments

$    (5,590.00)

$      5,590.00

Final Balances for Balance Sheet

$                  45,550.00

$                               -  

$                          -  

$               2,020.00

$                  80.00

$              43,500.00

$                 10,900.00

$        5,310.00

$                    -  

$      3,990.00

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