On May 1, R. C. Twining started RC Flying School, a company that provides flying lessons, by investing $40,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2014, and the revenues and expenses for the month of May.
|
Cash |
$ 3,400 |
Advertising Expense |
$ 600 |
|
Accounts Receivable |
4,900 |
Rent Expense |
1,200 |
|
Equipment |
64,000 |
Maintenance and Repairs Expense |
400 |
|
Notes Payable |
30,000 |
Gasoline Expense |
2,500 |
|
Accounts Payable |
800 |
Utilities Expense |
400 |
|
Service Revenue |
8,100 |
R. C. Twining made no additional investment in May, but he withdrew $1,500 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 the following data are not included above: (1) $900 worth of services were performed and billed but not collected at May 31, and (2) $1,500 of gasoline expense was incurred but not paid.