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	15,000	+	3,000	+	5,800	+	33,800	=	7,000	+	50,600	+	0		0
Paid for utilities	980														+ 980
New balances	14,020	+	3,000	+	5,800	+	33,800	=	7,000	+	50,600	+	0		980
Sold services for cash	+ 4,980												+ 4,980
New balances	19,000	+	3,000	+	5,800	+	33,800	=	7,000	+	50,600	+	4,980		980
Paid a creditor	2,100								2,100
New balances	16,900	+	3,000	+	5,800	+	33,800	=	4,900	+	50,600	+	4,980		980
Sold services on credit			+ 2,900										+ 2,900
New balances	16,900	+	5,900	+	5,800	+	33,800	=	4,900	+	50,600	+	7,880		980
Paid salaries	8,900														+ 8,900
New balances	8,000	+	5,900	+	5,800	+	33,800	=	4,900	+	50,600	+	7,880		9,880
Paid telephone bill	314														+ 314
New balances	7,686	+	5,900	+	5,800	+	33,800	=	4,900	+	50,600	+	7,880		10,194
Withdrew cash for personal expenses	3,000										3,000
New balances	4,686	+	5,900	+	5,800	+	33,800	=	4,900	+	47,600	+	7,880		10,194

Required:

Analyze each transaction carefully. Prepare an income statement and a statement of owners equity for the month. Prepare a balance sheet for May 31, 20X1.

Analyze:

In order to complete the balance sheet, which amount was transferred from the statement of owners equity?

• Income Statement
• Stmt of Owners Equity
• Balance Sheet
• Analyze

Prepare an income statement for the month of May 31, 20X1. (List the expenses in detail on the income statement.)