Problem 2.4A Preparing an income statement, a statement of owners equity, and a balance sheet. LO 2-4, 2-5

The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton.

	Assets							=	Liab.	+	Owners Equity
	Cash	+	Accts. Rec.	+	Supp.	+	Equip.	=	Accts. Pay.	+	T. Cotton, Capital	+	Rev.		Exp.
Balances, May 1	14,300	+	2,300	+	5,100	+	33,100	=	6,300	+	48,500	+	0		0
Paid for utilities	910														+ 910
New balances	13,390	+	2,300	+	5,100	+	33,100	=	6,300	+	48,500	+	0		910
Sold services for cash	+ 4,910												+ 4,910
New balances	18,300	+	2,300	+	5,100	+	33,100	=	6,300	+	48,500	+	4,910		910
Paid a creditor	1,750								1,750
New balances	16,550	+	2,300	+	5,100	+	33,100	=	4,550	+	48,500	+	4,910		910
Sold services on credit			+ 2,550										+ 2,550
New balances	16,550	+	4,850	+	5,100	+	33,100	=	4,550	+	48,500	+	7,460		910
Paid salaries	8,550														+ 8,550
New balances	8,000	+	4,850	+	5,100	+	33,100	=	4,550	+	48,500	+	7,460		9,460
Paid telephone bill	307														+ 307
New balances	7,693	+	4,850	+	5,100	+	33,100	=	4,550	+	48,500	+	7,460		9,767
Withdrew cash for personal expenses	2,300										2,300
New balances	5,393	+	4,850	+	5,100	+	33,100	=	4,550	+	46,200	+	7,460		9,767

Prepare an income statement for the month of May 31, 2016.

Prepare a statement of owners equity for the month of May 31, 2016.

Prepare a balance sheet for May 31, 2016.

Analyze:

Which amount was transferred from the statement of owners equity?