Case Analysis: Eric Caswell formed a lawn service company as a summer job. To start the business on May 1, he deposited $1000 in a new bank account in the name of the corporation. The $1000 consisted of a $600 loan from his father and $400 of his own money. The corporation issued 400 shares of common stock to Eric. Eric rented lawn equipment, purchased supplies, and hired high- school students to mow and trim his customers' lawns. At the end of each month, Eric mailed bills to his customers. On August 31, Eric was ready to dissolve the business and return to Baylor University for the fall semester. Because he had been so busy, he kept few records other than his checkbook and a list of amounts owed to him by customers At August 31, Eri checkbook shows a balanceof$81, and his customers still owe hin $500 During the summer, he collected $4400 from customers. His checkbook tists payments for supplies totaling $490, and he still has gasoline, weed-eater cord, and other supplies that cost a total of $50. He paid his employees $1,900, and he still owes them $200 for the final week of the summer. Eric rented some equipment from Ludwig Tool Company. On May 1, he signed a six-month lease on mowers and paid $600 for the full lease period. Ludwig will refund the unused portion of the prepayment if the equipment is in good shape. In order to get the refund, Eric has kept the mowers in excellent condition. In fact, he had to pay $360 to repair a mower that ran over a hidden tree stump. To transport employees and equipment to jobs, Eric used a trailer that he bought for $300 He figures that the summer's work used up one-third of the trailer's service potential. The business checkbook lists an expenditureof $460 for / dividends paid to Eric during the summer. Eric paid his father back during C the summer Required: 1. Prepare the income statement of Caswell Lawn Service, Inc., for the four months May through August. The business is not subject to 2. Prepare the beginning and ending balance sheets of Caswell Lawn 3. Was the lawn business a good business venture? Why or why not? One hint: The trailer that Eric purchased is a long-term asset that should be depreciated. income tax. Service, Inc., at May 1 and August 31. Case Analysis: Eric Caswell formed a lawn service company as a summer job. To start the business on May 1, he deposited $1000 in a new bank account in the name of the corporation. The $1000 consisted of a $600 loan from his father and $400 of his own money. The corporation issued 400 shares of common stock to Eric. Eric rented lawn equipment, purchased supplies, and hired high- school students to mow and trim his customers' lawns. At the end of each month, Eric mailed bills to his customers. On August 31, Eric was ready to dissolve the business and return to Baylor University for the fall semester. Because he had been so busy, he kept few records other than his checkbook and a list of amounts owed to him by customers At August 31, Eri checkbook shows a balanceof$81, and his customers still owe hin $500 During the summer, he collected $4400 from customers. His checkbook tists payments for supplies totaling $490, and he still has gasoline, weed-eater cord, and other supplies that cost a total of $50. He paid his employees $1,900, and he still owes them $200 for the final week of the summer. Eric rented some equipment from Ludwig Tool Company. On May 1, he signed a six-month lease on mowers and paid $600 for the full lease period. Ludwig will refund the unused portion of the prepayment if the equipment is in good shape. In order to get the refund, Eric has kept the mowers in excellent condition. In fact, he had to pay $360 to repair a mower that ran over a hidden tree stump. To transport employees and equipment to jobs, Eric used a trailer that he bought for $300 He figures that the summer's work used up one-third of the trailer's service potential. The business checkbook lists an expenditureof $460 for / dividends paid to Eric during the summer. Eric paid his father back during C the summer Required: 1. Prepare the income statement of Caswell Lawn Service, Inc., for the four months May through August. The business is not subject to 2. Prepare the beginning and ending balance sheets of Caswell Lawn 3. Was the lawn business a good business venture? Why or why not? One hint: The trailer that Eric purchased is a long-term asset that should be depreciated. income tax. Service, Inc., at May 1 and August 31