Noah Briscoe is a college student at Regent University. He is a rising senior and majors inbusiness administration. He wants to own his own business one day so that is why he is majoringin business. He wanted to work a summer job but did not want to be inside all the time due toCovid. He came up with the idea of starting a landscaping business so he could be outside andmake some money for college. Noah formed a small business with a small loan from his unclefor $1,200 at 10% and $800 of his own money. The Noah Briscoe Lawn Service issued $800 ofcommon stock to Noah. Noah rented lawn equipment, purchased the supplies he needed andhired other students to mow lawns and trim shrubbery. At the end of each month Noah wouldmail bills to the customers. On August 31, he was ready to dissolve the business so he couldreturn to college class’s full time. Because he was so busy he kept few records except for hischeckbook, his receipts and a list of all his customers.
On August 31, the business checkbook shows a positive balance, and customers still owed$1,500. During the four months the business was open the business collected $12,000 fromcustomers. The business checkbook lists payments for supplies totaling $700, and it still hasgasoline, week trimmer cord and other supplies that costs a total of $100. The business paidemployees $3,600 and still owes them $600 for the final week of the summer. Noah rented someequipment from the local machine shop. On May 1 when the business began, the business signeda six-month rental agreement on mowers and paid $1,200 for the full rental period in advance.The machine shop will refund the unused portion of the prepayment if the equipment is returnedin good condition. In order to get the refund, Noah has kept the mowers in excellent condition. Infact, the business had to pay $500 to repair a few of the mowers. In order to transport employeesand equipment to various mowing jobs, Noah used an old truck his grandfather gave him thatwas worth about $500 and a trailer that the business bought for $600. The business estimates thatthe summer’s work used up one-fourth of the truck and trailers service potential. The businesscheckbook lists a payment of $500 for cash dividends paid to Noah during the summer. Thebusiness paid the loan back during August as well. Other than that Noah has kept all the moneyin the business so he can have a nice amount at the end of the summer to help pay for his collegetuition.
Prepare the income statement