Problem P1-3B

Special Delivery was started on May 1 with an investment of $45,000 cash. To jump start its sales, the company spent significant money on advertising. Following are the assets and liabilities of the company on May 31, 2007, and the revenues and expenses for the month of May, its first month of operations. (On the attachment)

Important note: The answer should be on the attachment .

Name: Exercise: Course: Date: Problem P1-3B P1-3B Special Delivery was started on May 1 with an investment of $45,000 cash. To \"jump start\" its sales, the company spent significant money on advertising. Following are the assets and liabilities of the company on May 31, 2007, and the revenues and expenses for the month of May, its first month of operations. Accounts receivable $6,200 Wage expense 2,200 Service revenue $6,200 Equipment 60,300 Advertising expense $6,200 Repair expense 500 Accounts payable $6,200 Fuel expense 2,400 Cash $6,200 Insurance expense 400 Notes payable $6,200 No additional common stock was issued in May, but a dividend of $1,700 in cash was paid. Instructions: (a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2007. SPECIAL DELIVERY Income Statement For the month ended May 31, 2007 Revenues Account title Expenses Account title Account title Account title Account title Account title Total expenses Net income Amount Amount Amount Amount Amount Amount SPECIAL DELIVERY Retained Earnings Statement For the month ended May 31, 2007 Retained earnings, June 1 Add: Title Less: Account title Retained earnings, June 30 Formula Formula Amount Amount Formula Amount Formula qattachments_8990a13151c93bc86d0fef8e0bf88e6578b023a6.xls, Page 1 of 2, 04/26/201716:21:32 SPECIAL DELIVERY Balance Sheet May 31, 2007 Assets Account tite Account tite Account tite Total assets Amount Amount Amount Formula Liabilities and Stockholders' Equity Liabilities Account tite Account tite Total liabilities Stockholders' equity Account tite Account tite Total stockholders' equity Total liabilities and stockholders' equity Amount Amount Formula Amount Amount Formula Formula qattachments_8990a13151c93bc86d0fef8e0bf88e6578b023a6.xls, Page 2 of 2, 04/26/201716:21:32