Problem 1-7A (Static) Analyzing transactions and preparing financial statements LO 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 $40,000 cash in the company in exchange for its common stock.
		1		The company rented a furnished office and paid $2,200 cash for Mays rent.
		3		The company purchased $1,890 of equipment on credit.
		5		The company paid $750 cash for this months cleaning services.
		8		The company provided consulting services for a client and immediately collected $5,400 cash.
		12		The company provided $2,500 of consulting services for a client on credit.
		15		The company paid $750 cash for an assistants salary for the first half of this month.
		20		The company received $2,500 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 $1,890 cash for the equipment purchased on May 3.
		27		The company purchased $80 of equipment on credit.
		28		The company paid $750 cash for an assistants salary for the second half of this month.
		30		The company paid $300 cash for this months telephone bill.
		30		The company paid $280 cash for this months utilities.
		31		The company paid $1,400 cash in dividends to the owner (sole shareholder).

Q1:

Q2:

THE GRAM CO. Income Statement For Month Ended May 31 Revenues: Consulting services revenue $ 1,090,000 Expenses Rent expense Salaries expense Telephone expense Utilities expense Cleaning expense Total expenses 0 Net income THE GRAM CO. Statement of Retained Earnings For Month Ended May 31 Retained earnings, May 1 $ 0 Add: Net income 5,990 X 5,990 14,000 (8,010) Less: Dividends Retained earnings, May 31 $