Financial statements After its second year of operations, the following amounts were taken from…

Financial statements

After its second year of operations, the following amounts were taken from the accounting records of Ferguson Services, Inc., as of May 31, 2014. Ferguson Services began its operations on June 1, 2012 (see Problem 2-3).

Instructions

1. Prepare an income statement for the year ending May 31, 2014.

2. Prepare a retained earnings statement for the year ending May 31, 2014. (Note: The retained earnings at June 1, 2013, was $100,000.)

3. Prepare a balance sheet as of May 31, 2014.

4. Prepare a statement of cash flows for the year ending May 31, 2014. (Hint: You should compare the asset and liability amounts of May 31, 2014, with those of May 31, 2013, to determine cash used in investing and financing activities. See Problem 2-3 for the May 31, 2013, balance sheet amounts.)

Problem 2-3

Financial statements

The following amounts were taken from the accounting records of Ferguson Services, Inc., as of May 31, 2013. Ferguson Services began its operations on June 1, 2012.

Instructions

1. Prepare an income statement for the year ending May 31, 2013.

2. Prepare a retained earnings statement for the year ending May 31, 2013.

3. Prepare a balance sheet as of May 31, 2013.

4. Prepare a statement of cash flows for the year ending May 31, 2013.