Please write down the correct income statement, balance sheet and cash flow

BACC 7100 NVZ - Fall 2017 Financial Statement Case 1 Since 2007, Shirley U. Jest has been designing and selling unique handcrafted goods. She began by selling her products to a small number of specialty retailers. Then, in 2009, she opened her own retail store and started selling directly to customers. Jest incorporated the business as Jester's Inc. on January 1, 2012, with an initial stock issue of 2,000 shares of common stock at a par value of $3.50 per share. Shirley is the principal stockholder of Jester's Inc. Sales have increased steadily each year since operations began at the retail location, and Jest feels that the purchase of a specialized computer system is needed to accommodate continued growth. Jest wishes to finance the purchase of the system through a long-term note from a commercial bank. In support of Jest's loan request, the Last National Bank asked her to submit an income statement for Jester's Inc. for the first five months of 2012 and a balance sheet as of May 31, 2012. Jest assembled the following information from the cash basis records of the corporation for use in preparing the financial statements requested by the bank. 1. The check register showed the following 2012 deposits through May 31. Sales of common stock Cash sales Collections on credit sales Bank loan proceeds $ 7,000 22,770 6,320 3,000 $39,090 2. The following amounts were disbursed through May 31, 2012. Merchandise Inventory $14,400 Rent 2,520 Salaries and wages 6,500 Maintenance 110 Utilities 3,000 Insurance premium 2,880 Furniture and fixtures 3,000 Principal and interest payment on bank loan* 325 Advertising 424 $33,159 *The note evidencing the 3-year bank loan is dated January 1, 2012, and states a simple interest rate of 10%. The loan requires quarterly payments on April 1, July 1, October 1, and January 1 consisting of equal principal payments plus accrued interest since the last payment. 3. Unpaid invoices at May 31, 2012, were as follows. Merchandise Inventory Utilities $ $ 256 270 526 1 4. Customer records showed uncollected sales of $4,506 at May 31, 2012. Jester's expects to collect these amounts in the future. 5. Merchandise Inventory with a cost of $2,070 was available for sale on May 31, 2012. There was no Merchandise Inventory on hand on hand at January 1, 2012. 6. Shirley U. Jest receives a salary of $900 on the last day of each month. Her two part-time employees have been paid through May 25, 2012, and were due an additional $240 on May 31, 2012. 7. Furniture and fixtures costing $3,000 were purchased on January 2, 2012, and have an estimated useful life of 5 years and a salvage value of $600. These are the only fixed assets currently used in the business. Straight-line depreciation is to be used for book purposes. 8. Rent was paid for 9 months in advance on January 2, 2012. 9. A one-year insurance policy was purchased on January 2, 2012. 10. Jester's Inc. is subject to an income tax rate of 25%. 11. Payments and collections pertaining to the unincorporated business through December 31, 2011, were not included in the records of the corporation, and no cash was transferred from the unincorporated business to the corporation. Instructions: Using the accrual basis of accounting, prepare the following for Jester's Inc: (1) A multiple-step income statement for the 5 months ended May 31, 2012. (2) A classified balance sheet as of May 31, 2012. (3) A cash flow statement for the 5 months ended May 31, 2012. Use the direct method for cash flow from operations. 2