On May 1, 2020, Park Flying School Ltd., a company that provides flying lessons, was started with an investment of W45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2020, and the revenues and expenses for the month of May (all amounts in thousands).

No additional investments were made in May, but the company paid dividends of W480,000 during the month.

Instructions

a. Prepare an income statement and a retained earnings statement for the month of May and a statement of financial position at May 31. (Show numbers in thousands.)

b. Prepare an income statement and a retained earnings statement for May assuming the following data are not included above: (1) W900,000 worth of services were performed and billed but not collected at May 31, and (2) W1,500,000 of gasoline expense was incurred but not paid.

Transcribed Image Text:

Notes Payable Rent Expense Cash Accounts Receivable Equipment Service Revenue Advertising Expense Accounts Payable W28,000 W 4,500 7,420 1,000 Maintenance and Repairs Expense Gasoline Expense Utilities Expense 64,000 400 2,500 6,800 500 1,400 400