Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Everything looks good to me. I don't know why it is showing as incomplete I think some four entries are missing, two under Equipment use

Everything looks good to me. I don't know why it is showing as incomplete

I think some four entries are missing, two under Equipment use cost (depreciation) and two entry under Lawn Service Credit

image text in transcribed

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 $1,350. On each door he painted "James Cook Lawn Service, Phone 471 4487." He also spent $880 for mowers, trimmers, and tools. To acquire these items, he borrowed $2,610 cash by signing a note payable promising to pay the $2,610 plus interest of $75 at the end of the three months (ending August 31). 5 points 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 $13,200. The following checks had been written: gas, oil, and lubrication, $1.010: pickup repairs $280; mower repair $280, miscellaneous supplies used, $200: helpers $5,700; payroll taxes, $240, payment for assistance in preparing payroll tax forms, $40; insurance. $215; telephone $200; and $2,685 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 hin $890 for lawn services rendered and that he owed $210 for gas and oil credit card charges). He estimated that the cost for use of the truck and the other equipment (called depreciation) for three months amounted to $690. Required: 1. Prepare a quarterly income statement for James Cook Lawn Service for the months June, July, and August . Assume that the company will not be subject to income tax. Answer is not complete. 4 ISUULUVU Lawn service - cash Lawn service credit $ 13,200 890 O its $ 14,090 1,220 280 280 200 Total revenues Expenses Gas, oil, and lubrication Pickup repairs Repair of mowers Miscellaneous supplies used Helpers (wages) Payroll taxes Preparation of payroll tax forms Insurance Telephone Interest expense on note paid Equipment use cost (depreciation) OOOOOOOOOOO 5,700 240v 40 215 200 75 690 Total expenses Not in mo 9.140 4950

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Federal Taxation 2019

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

10th Edition

1260189988, 1260189678, 9781260189674, 978-1259917103, 125991710X, 978-1260190045

Students also viewed these Accounting questions

Question

Define Administration?

Answered: 1 week ago