Prepare an Income Statement and a Statement of Retained Earnings

question 3

Essay

Prepare an income statement and a statement of retained earnings for the month of May.Also,prepare a balance sheet as of May 31,2017,for McGuire Corporation.The financial transactions of McGuire Corporation for the month of May,their first month of operations,are as follows:
• On May 1,2017,McGuire Corporation issued common stock in exchange for $20,000 cash from a stockholder,Deborah Merchant.
• On May 3,the corporation borrowed $5,000 from a creditor and executed a note payable with the principal and interest to be due in one year.
• On May 7,the corporation purchased $15,000 of equipment for cash.
• On May 8,McGuire Corporation rendered service to a client and earned $3,000 in cash.
• On May 12,the corporation incurred a repair expense of $1,800 and promised to pay the repair contractor the following month.
• On May 18,the corporation rendered service to a new client in the amount of $8,000 on account,as the client promised to pay the following month.
• At the end of May,McGuire Corporation distributed cash dividends of $1,500.

---

Definitions:

Learning New Words

Learning new words involves the processes by which individuals acquire the understanding and usage of novel vocabulary, crucial for language development and communication skills.

Grammatical Morphemes

Small units of language added to words to convey grammatical relationships or functions, critical in the development of syntactic complexity.

English as a First Language

The condition of having English as one's primary and initial language of communication, typically learned from birth.

Grammar

The set of structural rules governing the composition of clauses, phrases, and words in any given natural language.