During the summer between her junior and senior years, Susan Irwin needed to earn sufficient money for
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A review of the check stubs showed the following: Bank deposits of collections from customers totaled $12,300. The following checks had been written: gas, oil, and lubrication, $940; pickup repairs, $250; mower repair, $110; miscellaneous supplies used, $80; helpers, $4,200; payroll taxes, $190; payment for assistance in preparing payroll tax forms, $25; insurance, $125; telephone, $110; and $2,565 to pay off the note including interest (on August 31). A notebook kept in the pickup, plus some unpaid bills, reflected that customers still owed her $700 for lawn services rendered and that she owed $180 for gas and oil (credit card charges). She estimated that the cost for use of the truck and the other equipment (called depreciation) for three months amounted to $600.
Required:
1. Prepare a quarterly income statement for Susan's Lawn Service for the months June, July, and August 2011. Use the following main captions: Revenues from Services, Expenses, and Net Income. Because this is a sole proprietorship, the company will not be subject to income tax.
2. Do you see a need for one or more additional financial reports for this company for 2011 and thereafter? Explain.
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