Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations. May 1 H. Graham invested $40,000 cash in the company in exchange for its common stock. 1 The company rented a furnished office and paid $2,300 cash for May's rent.. 3 The company purchased $1,900 of office equipment on credit. 5 The company paid $760 cash for this month's cleaning services. 8 The company provided consulting services for a client and immediately collected $5,200 cash. 12 The company provided $2,400 of consulting services for a client on credit. The company paid $770 cash for an assistant's salary for the first half of this 15 month. The company received $2,400 cash payment for the services provided on May 20 12. 22 The company provided $3,500 of consulting services on credit. 25 The company received $3,500 cash payment for the services provided on May 22. 26 The company paid $1,900 cash for the office equipment purchased on May 3. 27 The company purchased $80 of advertising in this month's (May) local paper on credit; cash payment is due June 1. 28 The company paid $770 cash for an assistant's salary for the second half of this month. 30 The company paid $350 cash for this month's telephone bill. 30 The company paid $260 cash for this month's utilities. 31 The company paid $1,700 cash in dividends to the owner (sole shareholder). Liabilities Equity Assets Accounts Receivable Date Cash + + Office Equipment Accounts Payable + Common Stock Dividends + Revenues Expenses 1 May + + = + $ 40,000 + $ 40,000 (2,300) 1 + + = + + 2,300 3 + + + 1,900 1,900 + 5 (760) + + = + + 760 8 5,200 + + + + 5,200 2,400 12 + 2,400 + = + + 15 + + = + + 770 (770) 2,400 20 + + = + + 22 + (2,400) 3,500 (3,500) + = + + 3,500 25 + + = + + 3,500 (1,900) 26 + + = (1,900) + + 27 + + 80 + + 80 28 (770) + + = + + 770 30 + + = + + 350 OOOO 30 + + = + + 260 (350) (260) |(1,700) $ 42,290 31 + + = + 1,700 + + $ 0 + $ $ 1,900 = 80 + $ 40,000 $ 1,700 $ 11,100 $ 5,290 + 3.1 Prepare Holden Graham Company's income statement for May. THE GRAHAM COMPANY Income Statement For Month Ended May 31 Revenues: Expenses 0 Total expenses Net income (loss) 3.2 Prepare Holden Graham Company's statement of Retained Earnings for May. THE GRAHAM COMPANY Statement of Retained Earnings For Month Ended May 31 Retained earnings, May 1 $ 0 0 Retained earnings, May 31 $ 0 3.3 Prepare Holden Graham Company's Balance Sheet for May 31. THE GRAHAM COMPANY Balance Sheet May 31 Liabilities Assets Equity Total assets $ 0 Total liabilities and equity $ 0 3.4 Prepare Holden Graham Company's statement of cash flows for May. (Cash outflows should be indicated with a minus sign.) THE GRAHAM COMPANY Statement of Cash Flows For Month Ended May 31 Cash flows from operating activities $ 0 Cash flows from investing activities 0 Cash flows from financing activities Cash flows from financing activities 0 $ 0 0 Cash balance, May 1 Cash balance, May 31 $ 0