[48] Special Exercise 09-(Correcting-Financial Statements next time.doc Peter Valente operates a document delivery company. For the first few months of the company's life (through April 30), the accounting records were maintained by an outside accounting service, According to those records, Valente's owner's Capital balance is $75,000 as of April 30. To save on company costs, Valente decides to keep the records himself. He manages to record May's transactions properly, however Valente has big problems classifying accounts into the financial statements. His versions of the Income Statement and Balance Sheet follow. Using the information contained in these misleading financial statements, prepare revised financial statements, including a statement of Owner's Equity, for the month of May. INSTRUCTIONS: Use your own paper to complete this exercise! For this problem prepare Income Statement. Statement of Owner Equity and Balance Sheet! Hints: 1. Reread the assignment with great care, underline important items 2 Except the Capital account, all account balances are correct. (subtotals may not be correct) 3 Remember after preparing an Income Statement, you must prepare a Statement of Owner's Equity before you can prepare a Balance Sheet. 4 The account titled "Delivery Fee Income" should be classified as an earned Revenue S. The account titled "Deferred Document Income" should be classified as a liability, Valente Delivery Company Income Statement For the month ended May 31, 2019 Revenue: Investments by owner 3,000 Deferred Document Income 6.000 Total revenues 9,000 Expenses: Rent expense 3.100 Telephone expense 600 Delivery equipment 5,400 Advertising expense 3,200 Utilities expense 300 Insurance expense 900 Withdrawals by owner Total expenses 19,500 Net Income (10,500) 6,000 Assets: Cash Accounts Receivable Prepaid Insurance Prepaid Rent Office supplies exp. Buildings Land Salaries Expense Total asset Valente Delivery Company Balance Sheet As of May 31, 2019 Liabilities: 3,900 Accounts Payable 2,400 2,700 Delivery fee income 18,000 1,800 Notes Payable 48,000 4,200 Total liabilities 68,400 300 81,000 36,000 Owner's Equity 3,000 Capital, Peter Valente 64,500 132,900 Total liabilities & equity 132,900 Special Exercise 09-(Comecting-Financial Statements next-time.doc