• Starting Balances as of May 1, 2023:
  • Cash: $25,000
  • Accounts Receivable: $18,000
  • Inventory: $40,000
  • Equipment: $100,000 (Accumulated Depreciation: $20,000)
  • Accounts Payable: $30,000
  • Capital: $133,000
• May 2023 Transactions:
  • Purchased inventory for $35,000 on account.
  • Paid $10,000 towards accounts payable.
  • Sold inventory for $55,000 (cost of goods sold: $30,000).
  • Collected $20,000 from accounts receivable.
  • Paid $15,000 in operating expenses.
  • Recorded depreciation expense of $2,000.

Requirements:

1. Journalize the transactions.
2. Post to the ledger accounts.
3. Prepare an adjusted trial balance.
4. Prepare the income statement and balance sheet as of May 31, 2023.