The accountant for Specialty Painting, Inc., posted adjusting entries (a) through (e) to the accounts at May 31, 2018. Selected balance sheet accounts and all the revenues and expenses of the entity follow in T-account form.

Requirements

1. Explain the purpose for each adjusting entry.

2. Calculate the ending balances for the accounts and use the appropriate accounts to prepare the income statement of Specialty Painting, Inc., for the month ended May 31, 2018. List expenses in order from largest to smallest.

3. Were the May operations successful? Give the reason for your answer.

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Accounts Receivable Supplies Accumulated Depreciation, Equipment Accumulated Depreciation, Building 650 (a) 450 900 1,650 (e) 7,500 625 33,600 2,800 (c) (b) Salaries Payable Service Revenue 1,750 (d) 6,800 1,650 Salaries Expense 3,500 1,750 Supplies Expense (a) Depreciation Expense, Depreciation Expense, 450| Equipment 625 Building (d) (b) (c) 2,800