1. On 1 May, John Smith started a new business. During May he carried out the following transactions:

1 May: Deposited $40,000 in a newly-opened business bank account.

2 May: Bought machinery for $12,000 cash and inventories $15,000 on credit.

3 May: Borrowed $7,000 from a bank and deposited it in the bank.

4 May: Bought a truck for $14,000 cash and withdrew $800 in cash for his own use.

5 May: Bought additional machinery costing $16,000. The machinery bought on 4 May was given in part exchange at a value of $9,500. The balance of the purchase price for the new machinery was paid in cash.

6 May: Smith received a grant of $5,000 and paid the amount into the business bank account. He also repaid $3,000 of the borrowings.

Required:

Prepare a profit and loss statement for the business for the month of May.