On May 1, Nimbus Flying School, a company that provides flying lessons, was started with an investment of $45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2017, and the revenues and expenses for the month of May. Cash $ 4,650 Notes Payable $28,000 Accounts Receivable 7,400 Rent Expense 900 Equipment 64,000 Maintenance and Repairs Expense 350 Service Revenue 6,800 Gasoline Expense 2,500 Advertising Expense 500 Utilities Expense 400 Accounts Payable 1,400 No additional investments were made in May, but the company paid dividends of $500 during the month. Prepare an income statement for the month of May. Prepare a retained earnings statement for the month of May.
On May 1, Nimbus Flying School, a company that provides flying lessons, was started with an investment of $45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2017, and the revenues and expenses for the month of May. Cash $ 4,650 Notes Payable $28,000 Accounts Receivable 7,400 Rent Expense 900 Equipment 64,000 Maintenance and Repairs Expense 350 Service Revenue 6,800 Gasoline Expense 2,500 Advertising Expense 500 Utilities Expense 400 Accounts Payable 1,400 No additional investments were made in May, but the company paid dividends of $500 during the month. Prepare an income statement for the month of May. Prepare a retained earnings statement for the month of May.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On May 1, Nimbus Flying School, a company that provides flying lessons, was started with an investment of $45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2017, and the revenues and expenses for the month of May.
| Cash | $ 4,650 | Notes Payable | $28,000 | |||
| Accounts Receivable | 7,400 | Rent Expense | 900 | |||
| Equipment | 64,000 | Maintenance and Repairs Expense | 350 | |||
| Service Revenue | 6,800 | Gasoline Expense | 2,500 | |||
| Advertising Expense | 500 | Utilities Expense | 400 | |||
| Accounts Payable | 1,400 |
No additional investments were made in May, but the company paid dividends of $500 during the month.
- Prepare an income statement for the month of May.
- Prepare a
retained earnings statement for the month of May. (List items that increase retained earnings first.) - Prepare a balance sheet at May 31. (List Assets in order of liquidity.)
- Prepare an income statement for May assuming the following data are not included above: (1) $900 worth of services were performed and billed but not collected at May 31, and (2) $1,500 of gasoline expense was incurred but not paid.
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