Problem
After several months of planning, Denise Murphy started a structural lab-test business for the civil engineering and construction industries called BreakToMeasure. The following events occurred during its first month:
On May 1, Murphy started the firm, investing $3,000 cash and $15,000 of equipment.
On May 2, BreakToMeasure paid $600 cash for furniture for the shop.
On May 3, BreakToMeasure paid $500 cash to rent space in a strip mall for May.
On May 4, it obtained $1,200 of equipment for the shop and received an invoice for this purchase.
On May 5, BreakToMeasure opened for business. Cash received from services provided in the first week and a half of business (ended May 15) is $825.
On May 15, it provided $100 of lab-test services on account (IE: it issued the customer an invoice).
On May 17, it received a $100 check for services previously rendered on account.
On May 17, it paid $125 cash to an assistant for working during the grand opening.
Cash received from services provided during the second half of May is $930.
On May 31, it paid a $400 on the invoice it received on May 4.
On May 31, it paid $900 cash dividends to Murphy.
1. Prepare an Income Statement for the month of May.
2. Prepare a direct method Cash Flow Statement for the month.
3. Prepare an Owners Equity Statement for the month.