AP 1–2

May

1

Issued share capital for $5,000 cash

1

Paid $1,500 rent in advance for three months: May, June, and July (recorded as prepaid expense)

2

Purchased %1,000 of supplies on credit (record the asset as unused supplies)

2

Received $1,000 cash from a customer for work to be performed at a later date

3

Billed a customer $1,500 for repairs performed

4

Paid $50 for an advertizement in The News

5

Received $250 cash for work completed today

10

Collected the amount billed on May 3

15

Paid $500 cash to a creditor

18

Borrowed $2,000 cash from the bank

20

Signed a major contract for work to be done in June

22

Purchased for cash $3,000 of equipment

25

Billed customers $3,500 for work completed to date

27

Paid the following expenses: electricity, $75; telephone, $25; and wages, $2,000

31

Transferred the amount of May’s rent ($500) from prepaid expense to rent expense

31

Counted $200 of supplies still on hand: the rest had been used during May

31

Competed $600 of work that had been paid on May2 and billed the customer.

Required:

1.

Record the above transactions on a transactions worksheet and calculate the total of each column at the end of May. Use the following headings on your worksheet.

2.

Prepare an income statement for the month of May. Identify the revenue earned as “Repairs”. Record the expenses in alphabetical order.