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May Financial Analysis for Two Businesses

Threet's Repair Shop had the following transactions in May: 1. Erica Threet invested $10,000 cash to start the business. 2. Equipment was purchased for $5,000 and office rent of $400 and supplies of $500 were paid in cash. 3. $6,100 in cash was received from customers for repairs, $750 of repairs were provided on account, and $120 was later collected for the account. AJ Pierzynski started AJ Flying School on May 1 by investing $40,000. The financial statements at May 31 show cash of $3,400, accounts receivable of $4,900, equipment of $64,000

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547 views2 pages

May Financial Analysis for Two Businesses

Threet's Repair Shop had the following transactions in May: 1. Erica Threet invested $10,000 cash to start the business. 2. Equipment was purchased for $5,000 and office rent of $400 and supplies of $500 were paid in cash. 3. $6,100 in cash was received from customers for repairs, $750 of repairs were provided on account, and $120 was later collected for the account. AJ Pierzynski started AJ Flying School on May 1 by investing $40,000. The financial statements at May 31 show cash of $3,400, accounts receivable of $4,900, equipment of $64,000

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Fares EL Deen
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

P1-1A

Threets Repair Shop was started on May 1 by Erica Threet. A summary of


May transactions is presented below.
1. Invested $10,000 cash to start the repair shop.
2. Purchased equipment for $5,000 cash.
3. Paid $400 cash for May office rent.
4. Paid $500 cash for supplies.
5. Incurred $250 of advertising costs in the Beacon News on account.
6. Received $6,100 in cash from customers for repair service.
7. Withdrew $1,000 cash for personal use.
8. Paid part-time employee salaries $2,000.
9. Paid utility bills $170.
10. Provided repair service on account to customers $750.
11. Collected cash of $120 for services billed in transaction (10).

Instructions
(a) Prepare a tabular analysis of the transactions, using the following column
headings: Cash,
Accounts Receivable, Supplies, Equipment, Accounts Payable, Owners
Capital, Owners Drawings, Revenues, and Expenses.
(b) From an analysis of the owners equity columns, compute the net income
or net loss for May.

P1-3A
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 owners equity statement for the
month of May and a balance sheet at May 31.

(b) Prepare an income statement and owners 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.

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