Problem 1-7A Analyzing transactions and preparing financial statements LO C4, P1, P2

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Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations.

May		1		G. Gram invested $40,500 cash in the company.
		1		The company rented a furnished office and paid $2,200 cash for Mays rent.
		3		The company purchased $4,430 of office equipment on credit.
		5		The company paid $780 cash for this months cleaning services.
		8		The company provided consulting services for a client and immediately collected $5,700 cash.
		12		The company provided $2,600 of consulting services for a client on credit.
		15		The company paid $780 cash for an assistants salary for the first half of this month.
		20		The company received $2,600 cash payment for the services provided on May 12.
		22		The company provided $3,200 of consulting services on credit.
		25		The company received $3,200 cash payment for the services provided on May 22.
		26		The company paid $4,430 cash for the office equipment purchased on May 3.
		27		The company purchased $80 of advertising in this months (May) local paper on credit; cash payment is due June 1.
		28		The company paid $780 cash for an assistants salary for the second half of this month.
		30		The company paid $350 cash for this months telephone bill.
		30		The company paid $280 cash for this months utilities.
		31		G. Gram withdrew $1,900 cash from the company for personal use.

Required: 1. Enter the amount of each transaction on individual items of the accounting equation. Do not determine new account balances after each transaction. (Enter the transactions in the given order. Enter reductions to account balances with a minus sign.) + Assets Accounts Receivable = Liabilities Accounts Payable Date Office Equipment Cash + + G. Gram, Capital Equity G. Gram, , + Withdrawals + Revenues - Expenses May 1 + + + + + = + + 1 3 + + + + 5 + + + = + - + + + + + + 8 12 + + + = + + 15 + + + = + + 20 + + = + + 22 + + + + 25 + + = + + 26 + + = + + 27 + + + + 28 + + + + 30 + + + + 30 + + + + 31 + + + + + + + 2.2. Prepare statement of owner's equity for May. 2.1. Prepare income statement for May. THE GRAM CO. Income Statement For Month Ended May 31 THE GRAM CO. Statement of Owner's Equity For Month Ended May 31 G. Gram, Capital, May 1 $ 0 Revenues: Expenses G. Gram, Capital, May 31 2.3. Prepare Balance Sheet for May 31. Total expenses THE GRAM CO. Balance Sheet May 31 Assets Liabilities Equity Total assets Total liabilities and equity 3. Prepare statement of cash flows for May (Cash outflows should be indicated with a minus sign.) THE GRAM CO. Statement of Cash Flows For Month Ended May 31 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash balance, May 1 Cash balance, May 31