Question

During the summer between his junior and senior years, James Cook needed to earn sufficient money for the coming academic year. Unable to obtain a job with a reasonable salary, he decided to try the lawn care business for three months. After a survey of the market potential, James bought a used pickup truck on June 1 for $1,160. On each door he painted "James Cook Lawn Service, Phone 471-4487." He also spent $680 for mowers, trimmers, and tools. To acquire these items, he borrowed $2,520 cash by signing a note payable promising to pay the $2,520 plus interest of $65 at the end of the three months (ending August 31)

Answer 1

Answer:

Half of the question is missing, so I looked for similar ones and found the attached image.

Explanation:

We must determine James' profit for the summer:

Cash collected $12,800

Receivables $730

total revenue = $13,530

Expenses:

Gas, oil and lubrication $1,080 + $190 = $1,270

Repairs $550

Supplies $230

Salaries $6,000

Payroll taxes $290

Filing taxes services $35

Insurance $245

telephone $270

interest expense $65 (I'll use the information provided in the question)

Depreciation $620

total expenses = $9,575

net income = $13,530 - $9,575 = $3,955