P2-3 Financial statements he following amounts were taken from the accounting records of Hargrove Services, In of May 31, 20Y7. Hargrove Services began its operations on June 1, 20Y6. Capital stock Cash Dividends Fees earned Interest expense Land Miscellaneous expense Notes payable Rent expense Salaries expense Taxes expense Utilities expense $ 30,000 62,000 13,000 300,000 2,000 98,000 8,000 30,000 28,000 87,000 22,000 40,000 4. Prepare a statement of cash fiows for the year ending May 31, 20Y7. P2-4 Financial statements After its second year of operations, the following amounts were taken from the accounting records of Hargrove Services, Inc., as of May 31, 20Y8. Hargrove Services began its operations on June 1, 20Y6 (see Problem 2-3). Capital stock Cash Dividends Fees earned Interest expense Land Miscellaneous expense Notes payable Rent expense Salaries expense Taxes expense Utilities expense 55,000 40,000 515,000 3,000 240,000 11,000 40,000 36,000 155,000 28,000 52,000 Instructions 1. Prepare an income statement for the year ending May 31, 20Y8. 2. Prepare a retained earnings statement for the year ending May 31, 20Y8. (Note: The retained earnings at June 1, 20Y7, was $100,000.) 3. Prepare a balance sheet as of May 31, 20Y8. 4. Prepare a statement of cash flows for the year ending May 31, 20Y8. (Hint: You should compare the asset and liability amounts of May 31, 20Y8, with those of May 31, 20Y7, to determine cash used in investing and financing activities. See Problem 2-3 for the May 31, 20Y7, balance sheet amounts.) 15 16 17 HARGROVE SERVICES, INC. Income Statement For the Year Ended May 31, 20Y8 19 20 21 Revenues: Fees earned S 515,000 Salaries expense Utilities expense Rent expense Taxes expense Interest expense Miscellaneous expense $ 155,000 52,000 36,000 28,000 3,000 11,000 23 24 25 26 27 28 29 30 31 32 2. Total expenses Net income 285,000 S 230,000 HARGROVE SERVICES, INC. Retained Earnings Statement For the Year Ended May 31, 20Y8 34 35 36 37 38 39 40 41 42 43 Retained earnings, June 1, 20Y7 Net income Less dividends Increase in retained earnings Retained earnings, May 31, 20Y8 S 230,000 40,000 44 3 45 46 47 48 49 HARGROVE SERVICES, INC. Balance Sheet May 31, 20Y8 Assets Pr. 2-4 Alignment Number AC49 4 3. HARGROVE SERVICES, INC. Balance Sheet May 31, 20Y8 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity 4. HARGROVE SERVICES, INC. Statement of Cash Flows For the Year Ended May 31, 20Y8 Cash flows from operating activities: Cash receipts from operating activities Cash payments for operating activities Net cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net cash flows from financing activities Cash as of June 1, 20Y7 Cash as of May 31, 20Y8 Pr. 2-4 O Type here to search