During the summer between her junior and senior years. Susan Irwin needed to earn sufficient money for the coming academic year. Unable to obtain a job with a reasonable salary, she decided to tr\ the lawn care business for three months. After a survey of the market potential. Susan bought a used pickup truck on June 1 for $1,500. On each door she painted "Susan's Lawn Service. Phone 471-

4487." She also spent $900 for mowers, trimmers, and tools. To acquire these items, she borrowed

$2,500 cash by signing a note payable promising to pay the S2.500 plus interest of $75 at the end of the three months (ending August 3 1 ).

At the end of the summer. Susan realized that she had done a lot of work, and her bank account looked good. This fact prompted her 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

$12,600. The following checks had been written: gas. oil. and lubrication. $920; pickup repairs.

$210: mower repair. $75; miscellaneous supplies used. $80: helpers. $4,500: payroll taxes. $175:

payment for assistance in preparing payroll tax forms. $25; insurance. $125: telephone. SI 10: and

$2,575 to pay off the note including interest (on August 3 1 ). A notebook kept in the pickup, plus some unpaid bills, reflected that customers still owed her $800 for lawn services rendered and that she owed

$200 for gas and oil (credit card charges). She estimated that the cost for use of the truck and the other equipment (called depreciation) for three months amounted to S500.

Required: 1. Prepare a quarterly income statement for Susan"s Lawn Service for the months June. July, and August 2003. Use the following main captions: Revenues from Services. Expenses, and Nei Income.

Because this is a sole proprietorship, the company will not be subject to income tax. 2. Do you see a need for one or more additional financial reports for this company for 2003 and thereafter? Explain.