Reference no: EM13378635

Juston Concerts inc. was organized on May 1, 2010, by two students majoring in education_ The two entrepreneurs provided entertainment for children's birthday parties to supplement their college career. The following transactions occurred during the first month of operations:

May 1: Received contribution of $6,000 from each of the two principal owners of
the new business in exchange for shares of stock.
May 1: Purchased lighting equipment for $300 on an open account. The company has
30 days to pay for the equipment.
May 5: Registered as a vendor with the city and paid the $25 monthly fee.
May 9: Purchased an event tent to set up at parties for $2,400 cash.
May 10: Purchased $100 in miscellaneous supplies on account. The company has
30 days to pay for the supplies.
May 15: Paid a $75 bill from local printer for advertisement signs.
May 17: Customers paid for services with cash of $1,500.
May 24: Billed the local park district $800 entertainment provided to a summer camp.
The park district is to pay one-half of the bill within five working days and the rest within 30 days.
May 29: Received 50% of the amount billed to the park district. May 30: Customers paid cash for parties of $2,000.
May 30: Paid wages of $300 to a friend who helped over the weekend.
May 31: Paid the balance due on the supplies.

Required

1. Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the following format. Identify each transaction with the date.

2. Prepare an income statement for the month ended May 31, 2010.

3. Prepare a classified balance sheet at May 31, 2010.

4. Why do you think the two students decided to incorporate their business rather than operate it as a partnership?a