Record transactions and calculate financial statement amounts The following are the transactions relating to the

formation of Gray Mowing Services Inc. and its first month of operations. Prepare an answer sheet with the columns

shown. Record each transaction in the appropriate columns of your answer sheet. Show the amounts involved and

indicate how each account is affected $(+$ or $-).$ After all transactions have been recorded, calculate the total assets,

liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month.

a$.$ The firm was organized and the initial stockholders invested cash of $$12,000.$

b$.$ The company borrowed $$18,000$ from a relative of one of the initial stockholders; a short$-$term note was signed.

c$.$ Two zero$-$turn lawn mowers costing $$7,600$ each and a professional trimmer costing $$2,600$ were purchased for

cash. The original list price of each mower was $$10,200,$ but a discount was received because the seller was having

a sale.

d$.$ Gasoline, oil, and several packages of trash bags were purchased for cash of $$1,800.$

e$.$ Advertising flyers announcing the formation of the business and a newspaper ad were purchased. The cost of these

items, $$3,400,$ will be paid in $30$ days.

f$.$ During the first two weeks of operations, $94$ lawns were mowed. The total revenue for this work was $$14,100$;

$$9,300$ was collected in cash, and the balance will be received within $30$ days.

g$.$ Employees were paid $$8,400$ for their work during the first two weeks.

h$.$ Additional gasoline, oil, and trash bags costing $$2,200$ were purchased for cash.

i$.$ In the last two weeks of the first month, revenues totaled $$18,400,$ of which $$7,500$ was collected.

j$.$ Employee wages for the last two weeks totaled $$10,200$; these will be paid during the first week of the next month.

k$.$ It was determined that at the end of the month the cost of the gasoline, oil, and trash bags still on hand was $$600.$

I. Customers paid a total of $$3,000$ due from mowing services provided during the first two weeks. The revenue for

these services was recognized in transaction $f.$

Answer sheet:

page $123$

Prepare an income statement and balance sheet After you have completed parts a through I in Exercise $4\mathrm{.}8,$ prepare

anidncome statement for Gray Mowing Services Inc. for the month presented and a balance sheet at the end of the

month using the captions shown on the answer sheet. Compare your answer in requirement h with your answer in requirement d$.$ What conclusions can you draw about the effects of operating leverage from the steps you performed in requirements f$,$ g$,$ and h$?$ create a break even analysis based on the nine questions in this case. Answer all of the questions, providing a MS Excel spreadsheet to demonstrate your analytical work. Provide written responses to each question in an attending MS Word document.