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.