Questions: Gabl Gram started The Gram Company, a new business that began operations on May 1. The Gram Company completed the following transactions during its first month of operations. May 1 G. Gram invested 40,000 cash in the company in exchange for its common stock. May 1 The company rented a furnished office and paid 2,200 cash for May's rent. May 5 The company purchased 1,890 of equipment on credit. May 8 The company provided cash for this month's cleaning services. May 12 The company provided 2,500 of consulting for a client and immediately collected 5,400 cash. May 15 The company paid 750 cash for an assistant's salary for the first half of this month. May 22 The company received 2,500 cash payment for the services provided on May 12. May 25 The company received 3,200 cash payment for the services provided on May 22 May 26 The company paid 1,890 cash for the equipment purchased on May 3. May 28 The company paid 750 cash for an assistant's salary for the second half of this month. May 30 The company paid 300 cash for this month's telephone bill. May 31 The company paid 1,400 cash in dividends to the owner (sole shareholder). Prepare the balance sheet for May 31.

To prepare the balance sheet for The Gram Company as of May 31, we need to summarize the company's assets, liabilities, and equity based on the transactions provided. Here are the steps to derive the balance sheet:

1. Calculate Total Assets:

   • Cash:

     • Initial investment: $40,000
     • Rent payment: -$2,200
     • Equipment purchase: -$1,890
     • Cleaning services: -$0 (no amount specified)
     • Consulting services collected: +$5,400
     • Assistant's salary (first half): -$750
     • Consulting services collected: +$2,500
     • Consulting services collected: +$3,200
     • Equipment payment: -$1,890
     • Assistant's salary (second half): -$750
     • Telephone bill: -$300
     • Dividends: -$1,400
     • Total Cash: $40,000 - $2,200 - $1,890 + $5,400 - $750 + $2,500 + $3,200 - $1,890 - $750 - $300 - $1,400 = $41,920

   • Equipment:

     • Purchased on credit: $1,890
     • Paid for equipment: $0 (already accounted in cash)
     • Total Equipment: $1,890

   • Accounts Receivable:

     • Consulting services provided: $2,500
     • Collected: -$2,500
     • Total Accounts Receivable: $0

   • Total Assets:

     • Cash: $41,920
     • Equipment: $1,890
     • Accounts Receivable: $0
     • Total Assets: $41,920 + $1,890 = $43,810

2. Calculate Total Liabilities:

   • Accounts Payable:

     • Equipment purchased on credit: $1,890
     • Paid for equipment: -$1,890
     • Total Accounts Payable: $0

   • Total Liabilities:

     • Accounts Payable: $0
     • Total Liabilities: $0

3. Calculate Total Equity:

   • Common Stock:

     • Initial investment: $40,000
     • Total Common Stock: $40,000

   • Retained Earnings:

     • Consulting services provided: $2,500
     • Collected: $5,400 + $2,500 + $3,200 = $11,100
     • Assistant's salary: -$750 - $750 = -$1,500
     • Telephone bill: -$300
     • Dividends: -$1,400
     • Retained Earnings: $11,100 - $1,500 - $300 - $1,400 = $7,900

   • Total Equity:

     • Common Stock: $40,000
     • Retained Earnings: $7,900
     • Total Equity: $40,000 + $7,900 = $47,900

4. Prepare the Balance Sheet:

The Gram Company Balance Sheet As of May 31

Assets:

• Cash: $41,920
• Equipment: $1,890
• Accounts Receivable: $0
• Total Assets: $43,810

Liabilities:

• Accounts Payable: $0
• Total Liabilities: $0

Equity:

• Common Stock: $40,000
• Retained Earnings: $7,900
• Total Equity: $47,900

Total Liabilities and Equity: $47,900

Note: There seems to be a discrepancy between the total assets and total equity. This could be due to an error in the calculation or missing information. Please review the transactions and calculations to ensure accuracy.