On May 1, Robert Neupert started Skyline Flying School, a company that provides flying lessons, by investing $45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2012, and the revenues and expenses for the month of May.
|
Cash |
$6,500 |
Notes Payable |
$30,000 |
|
Accounts Receivable |
7,200 |
Rent Expense |
1,200 |
|
Equipment |
64,000 |
Repair Expense |
400 |
|
Lesson Revenue |
8,600 |
Fuel Expense |
2,500 |
|
Advertising Expense |
500 |
Insurance Expense |
400 |
|
Accounts Payable |
800 |
Robert Neupert made no additional investment in May, but he withdrew $1,700 in cash for personal use.
Instructions
(a) Prepare an income statement and owner’s equity statement for the month of May and a balance sheet at May 31.
(b) Prepare an income statement and owner’s equity statement for May assuming that the data above need to be adjusted for the following items: (1) $900 of revenue was earned and billed but not collected at May 31, and (2) $3,300 of fuel expense was incurred but not paid.