In January, 2020 Karl the entrepreneur decided to start a taxi business. He bought a 3 year old car for $10,000, bought some ads in the annual Yellow Pages book for $1000, and some flyers for $100. He also spent $100 for an attachment to allow his phone to process credit cards, and $75 for a business license. In the first 2 months (prior to COVID-19) he collected $8000 in fares and tips, and paid $500 for gas and $30 for an oil change. He is insured under his personal auto policy (he doesn't plan to mention the customer if an accident happens while on a fare). He washes his car at home, and to protect it from some old enemies, he stores it for free in a garage his uncle could rent out for $100/month - his uncle wants to support his new business. After COVID-19 hit, he switched to delivering food for restaurants, for which he gets $5-10 per delivery. His income from this has been $4,000 in fees from restaurants, plus $1,500 in tips. Gas has cost $300. He's spent about $2500 on meals while working. In April had to get new tires when a couple blew out after driving near a construction site, so he called an old friend who asked for $200 up front, and $100 a month for the next 4 months. Karl is thinking about expanding and want to know what his income and financial position is, but hasn't taken an accounting course. He knows you're taking the class now and are pretty smart, and asked you to take a stab at it. Required: In a memo to Karl (max. 3 pages, but less is better), tell him what his business' income and financial position is as of the end of April with a set of financial statements. Explain how each number is calculated, and what if any issues you see in performing the calculation. If you have any questions, ask them on the Canvas Discussion Board, and the professor will get an answer from Karl