On May 1, Skyline Flying School, a company that provides flying lessons, was started with an investment of $45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2008, and the revenues and expenses for the month of May.
Cash |
5,600 |
Notes Payable |
30,000 |
Accounts Receivable |
7,200 |
Rent Expense |
1,200 |
Equipment |
64,000 |
Repair Expense |
400 |
Lesson Revenue |
7,500 |
Fuel Expense |
2,500 |
Advertising Expense |
500 |
Insurance Expense |
400 |
Accounts Payable |
800 |
No additional investments were made in May, but the company paid dividends of $1,500 during the month.
Instructions
(a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31.
(b) Prepare an income statement and a retained earnings statement for May assuming the following data are not included above: (1) $900 of revenue was earned and billed but not collected at May 31, and (2) $1,500 of fuel expense was incurred but not paid.