(Solved by Humans)-Problem 3-2 Transaction Analysis and Financial Statements Just Rolling Along Inc. was organized...

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Problem 3-2  Transaction Analysis and Financial Statements Just Rolling Along Inc. was organized on May 1 by two college students who recognized an opportunity to make money while spending their days at a beach along Lake Michigan. The two entrepreneurs plan to rent bicycles and in-line skates to weekend visitors to the lakefront. The following transactions occurred during the first month of operations: May 1:          Received contribution of $9,000 from each of the two principal owners of the new business in exchange for shares of stock. May 1:          Purchased ten bicycles for $300 each on an open account. The company has 30 days to pay for the bicycles. May 5:          Registered as a vendor with the city and paid the $15 monthly fee. May 9:          Purchased 20 pairs of in-line skates at $125 per pair, 20 helmets at $50 each, and 20 sets of protective gear (knee and elbow pads and wrist guards) at $45 per set for cash. May 10:        Purchased $100 in miscellaneous supplies on account. The company has 30 days to pay for the supplies. May 15:        Paid $125 bill from local radio station for advertising for the last two weeks of May. May 17:      Customers rented in-line skates and bicycles for cash of $1,800. May 24:        Billed the local park district $1,200 for in-line skating lessons provided to neighborhood children. The park district is to pay one-half of the bill within five working days and the rest within 30 days. May 29:        Received 50% of the amount billed to the park district. May 30:        Customers rented in-line skates and bicycles for cash of $3,000. May 30:        Paid wages of $160 to a friend who helped over the weekend. May 31:    Paid the balance due on the bicycles. Required 1.        Prepare a table to summarize the preceding transactions as they affect the accounting equa- tion. Use the format in Exhibit 3-1. Identify each transaction with the date. 2.        Prepare an income statement for the month of May. 3.        Prepare a classified balance sheet at May 31. 4.        Why do you think the two college students decided to incorporate their business rather than operate it as a partnership?