Tony Star formed a lawn service business as a summer job in California. To start the business on Sept 1, 2017, he deposited $1,000 in a new bank account in the name of the business. The $1,000 consisted of a $600 loan from Bank One to his company, Star Lawn Mowing Service, and $400 of his own money. The company issued $400 of capital to Star. Star rented lawn equipment, purchased supplies, and hired other students to mow and trim customers lawns.

At the end of each month, Star mailed bills to the customers. On December 31, he was ready to dissolve the business and return to university in January 2018. Because he was so busy, he kept few records other than the check book and a list of receivables from customers.

At December 31, the businesss check book shows a balance of $2,000, and customers still owe $750. During the summer, the business collected $5,500 from customers. The business check book lists payments for supplies totalling $400, and it still has supplies that cost a total of $50. The business paid employees $1,800 and still owes them $300 for the final week of the summer.

Star rented some equipment from Lambergs Mower Shop. On September 1, the business signed a six-month rental agreement on mowers and paid $600 for the full rental period in advance. Lambergs will refund the unused portion of the prepayment if the equipment is returned in good shape. In order to get the refund, Star has kept the mowers in excellent condition. In fact, the business had to pay $300 to repair a mower.

To transport employees and equipment to jobs, Star used a van that the business bought for $300. The business estimates that the summers work used up one-third of the vans service potential. The business check book lists a payment of $500 for cash withdrawals during the summer. The business paid the loan back during August. (Ignore any interest expense associated with the loan.)

Required:

Prepare the income statement and the statement of owners equity of Star Lawn Mowing Service for the four months starting September 1 through December 31, 2017. Subsequently prepare the balance sheet of Star Lawn Mowing Service at December 31, 2017.