Income statement and owners equity statement

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Reference no: EM13527704

On May 1, A. J. Pierzynski started AJ 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, 2012, and the revenues and expenses for the month of May.

Cash

$ 3,400

Notes Payable

$30,000

Accounts Receivable

4,900

Rent Expense

1,200

Equipment

64,000

Maintenance and Repairs Expense

400

Service Revenue

8,100

Gasoline Expense

2,500

Advertising Expense

600

Insurance Expense

400



Accounts Payable

800

A. J. Pierzynski 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 of revenue was earned and billed but not collected at May 31, and (2) $1,500 of gasoline expense was incurred but not paid.

Reference no: EM13527704

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