QUESTION 1

During the summer between his junior and senior years, James Cook needed to earn sufficient money for the coming academic year. Unable to obtain a job with a reasonable salary, he decided to try the lawn care business for three months. After a survey of the market potential, James bought a used pickup truck on June 1 for $1,320. On each door he painted "James Cook Lawn Service, Phone 471-4487." He also spent $720 for mowers, trimmers, and tools. To acquire these items, he borrowed $2,780 cash by signing a note payable promising to pay the $2,780 plus interest of $70 at the end of the three months (ending August 31).

At the end of the summer, James realized that he had done a lot of work, and his bank account looked good. This fact prompted him to become concerned about how much profit the business had earned.

A review of the check stubs showed the following: Bank deposits of collections from customers totaled $12,700. The following checks had been written: gas, oil, and lubrication, $1,010; pickup repairs, $410; mower repair, $230; miscellaneous supplies used, $120; helpers, $5,800; payroll taxes, $330; payment for assistance in preparing payroll tax forms, $35; insurance, $235; telephone, $130; and $2,850 to pay off the note including interest (on August 31). A notebook kept in the pickup, plus some unpaid bills, reflected that customers still owed him $750 for lawn services rendered and that he owed $190 for gas and oil (credit card charges). He estimated that the cost for use of the truck and the other equipment (called depreciation ) for three months amounted to $700.

Required:

1.

Prepare a quarterly income statement for James Cook Lawn Service for the months June, July, and August 2014. Assume that the company will not be subject to income tax.

QUESTION 2

Clints Stonework Corporation was organized on January 1, 2013. For its first two years of operations, it reported the following:

Net income for 2013	$	31,600
Net income for 2014		43,300
Dividends for 2013		14,000
Dividends for 2014		17,800
Total assets at the end of 2013		131,000
Total assets at the end of 2014		250,000
Common stock at the end of 2013		110,000
Common stock at the end of 2014		110,000

Required:

On the basis of the data given, prepare a statement of stockholders equity for 2014.