The following accounting equation worksheet shows the transactions for Data Services for its first month of business, May 2010:

Requirements
1. Analyze each transaction in the accounting equation worksheet and describe the underlying exchange that resulted in each entry.
2. Has the company been profitable this month? Explain.
3. Prepare an income statement for the month ended May 31, 2010.
4. Prepare a statement of shareholders€™ equity for the month ended May 31, 2010.
5. Prepare a statement of cash flows for the month ended May 31, 2010.
6. Prepare a balance sheet at May 31,2010.

Transcribed Image Text:

Assets Liabilities Shareholders' Equity Contributed Capital Retained Earnings All other All Common stock TransactionCashassets (Account) liabilities (Account) a.S 6,000 55,000 b. 15,000 15,000Notes payable (5-year) C. (10,00010,000 Land d. 6,500 Accounts 6,500 Revenue receivable 12,000 Revenue 12,000 (8,000)8,000 Land 3,500(3,500) Accounts f. receivable h. (2,100) (2,100) Expense (750) (750) Dividends