Question

Problem 2.4A (Static) Preparing an income statement, a statement of owner's equity, and a balance sheet. LO 2-4, 2-5 The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton + + Assets Accts. Rec. + Supp. + Equip. 3,000 + 5,800 + 33,800 Liab. Accts. Pay. 7, eee Owner's Equity T. Cotton, + Capital Rev. se,600 + + + Cash 15,000 980 14,020 + 4,980 19,00 Exp. @ + 980 980 - 3,000 5,800 + 33,800 7,eee + 58,600 4,980 + 3,000 + 5,800 + 33,800 7, eee se, tee . 980 Balances, May 1 Paid for utilities New balances Sold services for cash New balances Paid a creditor New balances Sold services on credit New balances Paid salaries New balances Paid telephone bill New balances 2,100 16,900 + 3,000 2,100 4,900 + 5,800 + 33,800 - 50,600 4,980 980 16,900 2,900 5,9ee + + 5,800 + 33,800 - 2,900 7,880 + 50, 600 + 8,900 980 + 8.900 9,880 + 5,900 + 5,800 + 33,800 4,900 + 50,600 + 7,880 314 7.686 5,900 + 5,800 + 33,800 4,900 + se, 600 + 7,880 10, 194 < Prev 2 of 2 !!! Next

Answer 1

$7,880 COTTON CLEANING SERVICE Income Statement Month Ended May 31, 20x1 Service Revenue Less: Expenses Salaries expense Utilities expense Telephone expense Total expenses Net Income $8,900 $980 $314 $10,194 -$2,314 COTTON CLEANING SERVICE Statement of Owners' Equity Month Ended May 31, 20X1 Opening balance, Capital Add: Net Income (Loss) during the year $50,600 -$2,314 $48,286 $3,000 $45,286 Less: Drawings Closing balance, Capital

COTTON CLEANING SERVICE Balance Sheet May 31, 20x1 Liabilities $4,686 Accounts payable $5,900 $5,800 Owner's Equity $33,800 Taylor Cotton, Capital Assets Cash Accounts receivable Supplies Equipment $4,900 $45,286 Total assets $50,186 Total Liabilities and Owners' Equity $50,186 Analyze Taylor Cotton Closing capital balance was transferred from Statement of Retained earnings