Skyline Flying School, Inc. was started on May 1 with an investment of \(\$ 45,000\) cash. Following are the assets and liabilities of the company on May 31, 1996, and the revenues and expenses for the month of May.

No additional investments were made by stockholders in May, but a dividend of \(\$ 1,700\) in cash was paid.
\section*{Instructions}

(a) Prepare an income statement and retained earnings statement for the month of May and a balance sheet at May 31 .

(b) Prepare an income statement and retained earnings statement for May assuming the following data are not included above: (1) \(\$ 800\) of fees were earned and billed but not collected at May 31, and (2) \(\$ 5,300\) of fuel expense was incurred but not paid.

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Cash $ 8,000 Accounts Receivable 7,000 Notes Payable Rent Expense $30,000 1,200 Equipment 64,000 Repair Expense 400 Fees Earned 9,600 Fuel Expense 2,200 Advertising Expense 500 Insurance Expense 400 Accounts Payable 800