On May 1, 2012, Aero Flying School Ltd. was formed, at which time all of its opening balances were zero. Its assets, liabilities, share capital, revenues, expenses, and dividends as at May 31 follow:

Instructions
(a) Prepare an income statement, statement of changes in equity, and statement of financial position for the month of May.
(b) Explain why it is necessary to prepare the financial statements in the order listed in (a).

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Cash Accounts receivable Equipment Accounts payable Bank loan payable Service revenue Interest expense Common shares $ 5,300 10,200 60,300 2,200 22,000 12,600 100 50,000 Advertising expense Rent expense Repair and maintenance expense Fuel expense Insurance expense Salaries expense Income tax expense Dividends $ 900 2,200 700 3,300 1,400 1,000 600 800