Prepare an income statement and a statement of retained earnings for the month of May (note space provided on two pages) for Shelby, Inc. Also prepare a balance sheet as of May 31, 2017. The financial transactions of Shelby, Inc. for May, their first month of operations, are:

On May 1, 2017, Shelby, Inc. issued common stock in exchange for $20,000 cash from a stockholder, Nan.

On May 3, the company borrowed $5,100 from a creditor and executed a note payable with the principal and interest to be due in one year.

On May 7, the company purchased $15,000 of equipment with cash.

On May 8, Shelby, Inc. rendered service to a client and earned $3,000 in cash.

On May 12, the company incurred a repair expense of $1,800 and promised to pay the repair contractor, Greyson, the following month.

On May 18, the company rendered service to a new client, Niki, in the amount of $8,000 on account. Niki promises to pay the following month.

At the end of May, Shelby, Inc. distributed cash dividends to BA211 stockholders for $1,200.