Question

On May 1, Nimbus 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, 2015, and the revenues and expenses for the month of May.
Cash ............... $ 4,650
Accounts Receivable .......... 7,400
Equipment .............. 64,000
Service Revenue ........... 6,800
Advertising Expense .......... 500
Accounts Payable ........... 1,400
Notes Payable ........... $28,000
Rent Expense ............ 900
Maintenance and Repairs Expense ... 350
Gasoline Expense ........... 2,500
Utilities Expense .......... 400

No additional investments were made in May, but the company paid dividends of $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 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.



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  • CreatedFebruary 17, 2014
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