ACCT 1036 : Principle Of Accounting

Dave Payment formed a lawn service business, Payment Lawn Service, as a summer job.To start the business on May 1, he deposited $2,500 in a new bank account in the name of the proprietorship. The $2,500 consisted of a $2,000 loan from his father and $500 of his own money, so Dave invested $500 of capital in the business.Dave rented lawn equipment, purchased supplies, and hired high school students to mow and trim his customers’ lawns.At the end of each month, Dave mailed bills to his customers. On August 31, he was ready to dissolve the business and return to university for the fall semester. Because he had been so busy, he had kept few records other than his chequebook and a list of amounts owed to him bycustomers.At August 31, Dave’s chequebook shows a balance of $2,100, and his customers still owe him $1,000. During the summer, he collected $7,500 from customers. His chequebook lists payments for suppliestotalling $900, and he still has gasoline, weed-eater cord, and other supplies that cost a total of $250. He paid his employees $2,100, and he still owes them $500 for the final week of the summer.Dave rented some equipment from Supreme Tools Ltd. On May 1, the business signed a sixmonth lease on mowers and paid $900 for the full lease period. Supreme will refund the unused portion of the prepayment if the equipment is in good shape. In order to get the refund, Davehas kept the mowers in excellent condition. In fact, he had to pay $450 to repair a mower that ran over a hidden tree stump.To transport employees and equipment to jobs, Dave used a trailer that the business bought for $750. He figures that the summer’s work used up one-third of the trailer’s service potential. The business chequebook lists an expenditure of $900 for cash withdrawals by Dave during the summer. Dave paid his father back during August.
Submit the following requirements:
1. Prepare the income statement and the statement of owner’s equity of Payment Lawn Service for the four months May through August.
2. Prepare the classified balance sheet of Payment Lawn Service at August 31.
3. Was Dave’s summer business undertaking successful? Give the reasons for your answer.
Submission Requirements:
A. Due for Blackboard individual online submission on or before Monday,
October 28, 2019, 8: a.m.
B. F


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