Franken Company, a ski tuning and repair shop, opened on November 1, 2024. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2025.

The repair shop equipment was purchased on November 1 and has an estimated useful life of 4 years. Lease payments to the landlord are made at the beginning of each month. The part-time helper is owed \(\$ 420\) at April 30, 2025, for unpaid wages. At April 30, 2025, customers owe Franken Company \(\$ 540\) for services they have received but have not yet paid for.

Instructions

a. Prepare an accrual-basis income statement for the 6 months ended April 30, 2025.

b. Prepare the April 30, 2025, classified balance sheet.

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Issuance of common shares Payment to purchase repair shop equipment Rent payments to landlord Newspaper advertising payment Utility bill payments Part-time helper's wage payments Income tax payment Cash receipts from ski and snowboard repair services Subtotals Cash balance Totals Cash Receipts $20,000 32,150 52,150 $52,150 Cash Payments $ 9,200 1,050 375 970 2,600 10,000 24,195 27,955 $52,150