Question

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
Accounts Receivable ............. 4,900
Equipment ............... 64,000
Notes Payable ............... 30,000
Accounts Payable ............ 800
Service Revenue .............. 8,100
Advertising Expense ........... $ 600
Rent Expense .............. 1,200
Maintenance and Repairs Expense ....... 400
Gasoline Expense ............. 2,500
Utilities Expense ............. 400

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.



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  • CreatedJanuary 30, 2014
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