Problem 2.4A (Algo) Preparing an income statement, a statement of owner's equity, and a balance sheet. LO 2-4, 2-5 The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton. Assets Accts. Rec. 2,900 + Liab. Accts. Pay. 6,900 + Owner' s Equity T. Cotton, Capital + Rev. 50, 300 + 0 + + Exp. . Supp. + Equip. = 5,700 + 33, 700 = 0 + 970 970 2, 900 + 5,700 + 33, 700 = 6, 900 + 50, 300 + Cash 14, 900 + - 970 13, 930 + + 4,970 18,900 + - 2,050 16,850 + 0 + 4,970 4,970 2,900 + 5, 700 + 33, 700 = 50, 300 + 970 6,900 + 2,050 4, 850 + 50, 300 970 Balances, May 1 Paid for utilities New balances Sold services for cash New balances Paid a creditor New balances Sold services on credit New balances Paid salaries New balances Paid telephone bill New balances Withdrew cash for personal expenses New balances 2, 900 + 5,700 + 33, 700 + 2,850 5,750 + 5, 700 + 33, 700 = 4,970 2, 850 7,820 4, 850 + 50, 300 16, 850 + 8,850 8,000 + - 313 7,687 + 2,900 5,750 5, 750 + 5,700 + 33, 700 = 4,850 + 50,300 50, 300 + 7,820 970 + 8, 850 9, 820 + 313 10, 133 5,750 + 5,700 + 33, 700 = 4, 850 + 7,820 50, 300 + 2, 900 47, 400 4,787 5,750 + 5,700 + 33, 700 = 4, 850 + 7,820 10, 133 Required: Analyze each transaction carefully. Prepare an income statement and a statement of owner's equity for the month. Prepare a balance sheet for May 31, 20X1. Analyze: In order to complete the balance sheet, which amount was transferred from the statement of owner's equity? Income Statement Stmt of Owners Eqty Balance Sheet Analyze Prepare an income statement for the month of May 31, 20X1. (List the expenses in detail on the income statement.) COTTON CLEANING SERVICE Income Statement Month Ended May 31, 20X1 Revenue Expenses Total expenses Income Statement Stmt of Owners Eqty > Income Statement Stmt of Owners Eqty Balance Sheet Analyze Prepare a statement of owner's equity for the month of May 31, 20X1. COTTON CLEANING SERVICE Statement of Owner's Equity Month Ended May 31, 20X1 Income Statement Stmt of Owners Eqty Balance Sheet Analyze Prepare a balance sheet for May 31, 20X1. COTTON CLEANING SERVICE Balance Sheet May 31, 20X1 Liabilities Assets Owner's Equity Total Assets Total Liabilities and Owner's Equity Income Statement Stmt of Owners Eqty Balance Sheet Analyze Which amount was transferred from the statement of owner's equity? Owner's equity