1-a. Based on the information given the income statement for May is $5,750.
1-b. The statement of retained earnings for May is $4,350.
1-c. The balance sheet for May 31 is $45,430, $45,430.
2. The statement of cash flows for May is $43,410.
<h3>
Income statement:</h3>
1-a) Gabi gram co. Income Statement For Month Ended May 31
Revenues:
Consulting fees revenue $11,200
($5,200+$2,600+$3,400)
Expenses:
Salary expense $1,440
($720+720)
Cleaning expense $740
Telephone expense $400
Utilities expense $270
Rent expense $2600
Total expenses $5,450
Net income $5,750
($11,200-$5,450)
1-b) Statement of Retained Earnings
Gabi gram co. Statement of Retained earnings For Month Ended May 31
Retained earnings, May 1 $0
Add: Net income $5,750
Less: Dividends ($1,400)
Retained earnings, May 31 $4,350
($5,750-$1,400)
1-c) Balance Sheet
Gabi gram co. Balance Sheet May 31
Assets
Cash $43,410
($41000-$2600-$740+$5200-$720+$2600+$3400-$1940-$720-$400-$270-$1400)
Accounts receivable $0
($2600-$2600+$3400-$3400)
Office equipment $2,020
($1940+$80)
Total assets $45,430
Liabilities
Accounts payable $80
($1940-$1940+$80)
Equity
Common stock $41,000
Retained earnings $4,350
Total liabilities and equity $45,430
2- Cash Flow Statement
Gabi gram co. Statement of Cash Flows For Month Ended May 31
Cash flow from Operating activities:
Cash received from customers $11,200
($5200+$2600+$3400)
Cash paid for rent ($2,600)
Cash paid for cleaning services ($740)
Cash paid to employees ($1,440)
($720+$720)
Cash paid for telephone ($400)
Cash paid for utilities ($270)
Net cash provided by operating activities $5,750
Cash flow from Investing activities:
Purchase of office equipment ($1,940)
Net cash used in investing activities ($1,940)
Cash flow from financing activities:
Investment by shareholder $41,000
Dividend paid ($1,400)
Net cash provided by financing activities $39,600
Net increase (decrease) in cash $43,410
($5750-$1940+$39600)
Add: Beginning cash balance $0
Ending cash balance $43,410
Inconclusion the income statement for May is $5,750, statement of retained earnings for May is $4,350, balance sheet for May 31 is $45,430, $45,430 and statement of cash flows for May is $43,410.
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