CS-1 LO 134567 Granyard Clockworks is a service company that repairs damaged watches and clocks. The company is owned by Maurice Granyard. Maurice is fully liable for all activities of the business. In the most recent month (May 2019), Granyard Clockworks had the following transactions. 1. Maurice deposited $40,000 of additional cash into the business 2. Borrowed $15,000 in cash from the bank 3. Paid $3,500 cash for May's rent 4. Paid $6,000 in salaries for May 5. Performed services and earned $18,000 in cash 6. Incurred telephone expenses of $500 (to be paid next month) 7. Performed services for a client for $3,000 on account 8. Prepaid insurance for one year in the amount of $11,000 9. Incurred maintenance expense of $1.000 (on account) 10. Maurice withdrew $5,000 from the business for personal use 11. Received $2,000 cash for repair services to be done in July 12. Collected 80% of the $3,000 amount owing from a client for services performed earlier this month As at April 30, 2019, the ending account balances for Granyard Clockworks were as follows. Cash $50,000 Accounts Receivable 12,000 Prepaid Insurance 800 Equipment 40.000 Accounts Payable 2,000 Bank Loan 60.000 Granyard, Capital 40.800 Required a) Complete the T-account worksheet for May 2019, 100 Linking Personal Accounting to Business Accounting Chapter 2 Granyard Clockworks Balance Sheet As at May 31, 2019 Assets Liabilities Increase Decrease Decrease Increase Cash Accounts Payable Opening Opening Granyard Clockworks Income Statement For the Month Ended May 31, 2019 Revenue Decrease Increase revenue Less Expenses Increase Decrease Maintenance Expense Increase Decrease Accounts receivable. Openind Decrease Increase unearned revenue Cering Increase Decrease RE Decrease Increase BANK LOAN Opening Increase Decrease PREPAID INSURANCE - Openind Increase Decrease SIE ERRES OWNER'S EQUITY Decrease Increase GRANYARD, Capital Opening Decrease Increase Equipment Opening + Increase Decrease Increase Decrease GRANYARD, WITHDRAWALS Total Assets Total Liabilities Owner's Equity Total Revenue Less Tut Expenses Net Income (Loss) b) Using the info above, prepare the following financial statements for Granyard Clockworks. 1. Income Statement for the month of May 2019. ii. Statement of Owner's Equity for the month ended May 31, 2019 iii. Balance Sheet as at May 31, 2019 c) Explain the impact on each of the above financial statements if Maurice recorded transaction #11 as revenue in May. Are you concerned with this reporting? Include in your explanation the parties who would be most impacted by this reporting if it is not corrected, and why Maurice may have chosen to report the transaction this way