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Travis McAllister operates a surveying company. For the first few months of the company's life (through April), the accounting records were maintained by an outside bookkeeping service. According to those records, McAllister's equity balance was $75,000 as of April 30. To save on expenses, McAllister decided to keep the records himself. He managed to record May's transactions properly, but was a bit rusty when the time came to prepare the financial statements. His first versions of the balance sheet and income statement follow. McAllister is bothered that the company apparently operated at a loss during the month, even though he was very busy. Revenue: Investments by owner Unearned surveying fees Profit (loss) Operating expenses: Rent expense Telephone expense Surveying equipment Advertising expense Utilities expense Insurance expense Withdrawals by owner Cash Accounts receivable Prepaid insurance Prepaid rent Office supplies Buildings Land Salaries expense Total assets Total revenues Total operating expenses Assets McAllister Surveying Income Statement For Month Ended May 31, 2023 $ 3,900 2,700 1,800 4,200 300 81,000 36,000 3,000 $132,900 McAllister Surveying Balance Sheet May 31, 2023 Accounts payable Surveying fees earned Short-term notes payable Total liabilities Travis McAllister, capital Total liabilities and equity $3,100 600 5,400 3,200 300 900 6,000 Liabilities Equity $3,000 6,000 $ 9,000 19,500 $(10.500) $ 2,400 18,000 48.000 $ 68,400 64.500 $132,900

Travis McAllister operates a surveying company. For the first few months of the company's life (through April), the accounting records were maintained by an outside bookkeeping service. According to those records, McAllister's equity balance was $75,000 as of April 30. To save on expenses, McAllister decided to keep the records himself. He managed to record May's transactions properly, but was a bit rusty when the time came to prepare the financial statements. His first versions of the balance sheet and income statement follow. McAllister is bothered that the company apparently operated at a loss during the month, even though he was very busy. Revenue: Investments by owner Unearned surveying fees Profit (loss) Operating expenses: Rent expense Telephone expense Surveying equipment Advertising expense Utilities expense Insurance expense Withdrawals by owner Cash Accounts receivable Prepaid insurance Prepaid rent Office supplies Buildings Land Salaries expense Total assets Total revenues Total operating expenses Assets McAllister Surveying Income Statement For Month Ended May 31, 2023 $ 3,900 2,700 1,800 4,200 300 81,000 36,000 3,000 $132,900 McAllister Surveying Balance Sheet May 31, 2023 Accounts payable Surveying fees earned Short-term notes payable Total liabilities Travis McAllister, capital Total liabilities and equity $3,100 600 5,400 3,200 300 900 6,000 Liabilities Equity $3,000 6,000 $ 9,000 19,500 $(10.500) $ 2,400 18,000 48.000 $ 68,400 64.500 $132,900

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Using the information contained in the original financial statements, prepare corrected 
statements, including a statement of changes in equity, for the month of May

Travis McAllister operates a surveying company. For the first few months of the company's life (through April), the accounting records were maintained by an outside bookkeeping service. According to those records, McAllister's equity balance was $75,000 as of April 30. To save on expenses, McAllister decided to keep the records himself. He managed to record May's transactions properly, but was a bit rusty when the time came to prepare the financial statements. His first versions of the balance sheet and income statement follow. McAllister is bothered that the company apparently operated at a loss during the month, even though he was very busy. Revenue: Investments by owner Unearned surveying fees Profit (loss) Operating expenses: Rent expense Telephone expense Surveying equipment Advertising expense Utilities expense Insurance expense Withdrawals by owner Cash Accounts receivable Prepaid insurance Prepaid rent Office supplies Buildings Land Salaries expense Total assets Total revenues Total operating expenses Assets McAllister Surveying Income Statement For Month Ended May 31, 2023 $3,900 2,700 1,800 4,200 300 81,000 36,000 3,000 $132,900 McAllister Surveying Balance Sheet May 31, 2023 Accounts payable Surveying fees earned Short-term notes payable Total liabilities Travis McAllister, capital Total liabilities and equity $3,100 600 5,400 3,200 300 900 6.000 Liabilities Equity $3,000 6,000 $ 9,000 19,500 $(10,500) $ 2,400 18,000 48,000 $68,400 64,500 $132,900
Transcribed Image Text:Travis McAllister operates a surveying company. For the first few months of the company's life (through April), the accounting records were maintained by an outside bookkeeping service. According to those records, McAllister's equity balance was $75,000 as of April 30. To save on expenses, McAllister decided to keep the records himself. He managed to record May's transactions properly, but was a bit rusty when the time came to prepare the financial statements. His first versions of the balance sheet and income statement follow. McAllister is bothered that the company apparently operated at a loss during the month, even though he was very busy. Revenue: Investments by owner Unearned surveying fees Profit (loss) Operating expenses: Rent expense Telephone expense Surveying equipment Advertising expense Utilities expense Insurance expense Withdrawals by owner Cash Accounts receivable Prepaid insurance Prepaid rent Office supplies Buildings Land Salaries expense Total assets Total revenues Total operating expenses Assets McAllister Surveying Income Statement For Month Ended May 31, 2023 $3,900 2,700 1,800 4,200 300 81,000 36,000 3,000 $132,900 McAllister Surveying Balance Sheet May 31, 2023 Accounts payable Surveying fees earned Short-term notes payable Total liabilities Travis McAllister, capital Total liabilities and equity $3,100 600 5,400 3,200 300 900 6.000 Liabilities Equity $3,000 6,000 $ 9,000 19,500 $(10,500) $ 2,400 18,000 48,000 $68,400 64,500 $132,900
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