Kathy Lola, a student at the Upm, formed a lawn service business as a part-time job. To start the business on May 1st, 2019, she deposited RM1,000 in a new bank account in the name of the business. The RM1,000 consisted of an RM600 loan from Bank One to the company, Lola Lawn Service, and RM400 of her own money. The company issued RM400 of capital to Kathy. The business rented lawn equipment, purchased supplies, and hired other students to mow and trim customers lawns. At the end of each month, Kathy mailed bills to the customers. On August 31st, she was ready to dissolve the business and return to her study. Because she was so busy, she kept few records other than the chequebook and a list of receivables from customers. At August 31st, the businesss chequebook shows a balance of RM2,000, and customers still owe RM750. During May to August, the business collected RM5,500 from customers. The business checkbook lists payments for supplies totalling RM400, and it still has gasoline, weed trimmer cord, and other supplies that cost a total of RM50. The business paid employees RM1,800 and still owes them RM300 for the final week of the summer. Kathy rented some equipment from Kamals Machine Shop. On May 1st, the business signed a six-month rental agreement on mowers and paid RM600 for the full rental period in advance. Kamals will refund the unused portion of the prepayment if the equipment is returned in good shape. In order to get the refund, Kathy has kept the mowers in excellent condition. In fact, the business had to pay RM300 to repair a mower. To transport employees and equipment to jobs, Kathy used a trailer that the business bought for RM300. The business estimates that the summers work used up one-third of the trailers service potential. The business chequebook lists a payment of RM500 for cash withdrawals during in between May to August. The business paid the loan back during August. Assume no interest was charged to the loan made.

A) Prepare the income statement of Lola Lawn Service for the four months May 1 st through August 31st, 2019.

B) Prepare the statement of owners equity of Lola Lawn Service for the four months of May 1st through August 31st , 2019.

C) Prepare the classified balance sheet of Lola Lawn Service as at August 31st , 2019.

D) Determine whether Lolas business was successful or not based on your answer in Q1 (a) (c).