Analyzing a Student's Business and Preparing an Income Statement (AP1-2) 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 $1,800. On each door he painted "James Cook Lawn Service, Phone 471-4487." He also spent $900 for mowers, trimmers, and tools. To acquire these items, he borrowed $3,000 cash by signing a note payable promising to pay the $3,000 plus interest of $78 at the end of the three months (ending August 31 ). By the end of the summer, James had done a lot of work and his bank account looked good. This prompted him to wonder how much profit the business had earned. A review of the check stubs showed the following: Bank deposits of collections from customers totaled $15,000. The following checks had been written gas, oil, and lubrication, $1,050; pickup repairs, $250; mower repair, \$110; miscellaneous supplies used, \$80; helpers, \$5,400; payroll taxes, \$190; payment for assistance in preparing payroll tax forms $25; insurance, $125; telephone, $110; and $3,078 to pay off the note including interest (on August 31). A notebook kept in the pickup, plus some unpaid bills, reflected that customers still owed him $700 for lawn services rendered and that he owed $180 for gas and oil (credit card charges). He estimated that the cost for use of the truck and the other equipment (called depreclation) for three months amounted to $600. Required: 1. Prepare a quarterly income statement for James Cook Lawn Service for the months June, July, and August. Use the following main captions: Revenues from Services, Expenses, and Net Income. Assume that the company will not be subject to income tax. 2. Do you see a need for one or more additional financial reports for this company for the quarter and thereafter? Explain