1-May Issued common stock in exchange for cash $50,000 1-May Purchased a one-year insurance policy to be consumed evenly over the next 12 months $4,800 1-May Prepaid the next 6 months of rent $3,600 1-May Purchased for cash a truck to be used in the business $18,000 5-May Received prepayment of cash for a contracted job to be performed in June $4,500 5-May Purchased Office Supplies on credit $1,200 10-May Billed customers for services provided $8,600 12-May Paid advertising expense $1,300 23-May Paid salaries to employees $1,500 31-May Paid dividends to stockholders $1,000 Adjusting Entries: Recognize rent for month of May Recognize insurance for month of May Recognize Depreciation for on month Truck has a 5 year useful life and a $3,000 salvage Value An inventory count of office supplies at may 31 showed $500 of suppies on hand Employees' salaries earned durning May but not to be paid until June was $500

REQUIRED: Place in t-account form.

Cash

Accounts payable

Service Revenue

Unearned Revenue

Supplies Expense

Dividend Expense

Accounts Receivable

Truck

Accumplated Dep

Prepaid Insurance

Prepaid rent

Supplies

Salaries payable

Stock

Salaries Expense

Advertising Expense

Dep Exp

Insurance Exp

Rent Exp

REQUIRED: Prepare an income statement:

INCOME STATEMENT Service Revenue Expenses: Supplies Expense Salary Expense Rent Expense Insurance Expense Advertising Expense Depreciation Expense NET INCOME STATEMENT OF RETAINED EARNINGS Beg Bal Retained earnings $- 0 Plus Net Income Less Dividends Paid End bal Retained Earnings

REQUIRED: Prepare the balance sheet:

BALANCE SHEET ASSETS Current: Cash Acc Rec Supplies Prepaid Rent Prepaid Insur TOTAL CURRENT ASSETS Truck Accum Dep TOTAL ASSETS LIABILITIES Acc. Payable Unearned Revenue Salary Payable EQUITY Stock Retained Earnings TOTAL LIAB. + EQUITY