P1-1A Kinney’s Repair Ltd. was started on May 1.

A summary of May transactions is presented below

1. Shareholders invested £10,000 cash in the business in exchange for ordinary shares.
2. Purchased equipment for £5,000 cash.
3. Paid £400 cash for May office rent.
4. Paid £500 cash for supplies.
5. Incurred £250 of advertising costs in the Beacon News on account.
6. Received £4,700 in cash from customers for repair service.
7. Declared and paid a £1,000 cash dividend.
8. Paid part-time employee salaries £1,000.
9. Paid utillity bills £140.
10. Provided repair service on account to customers £980.
11. Collected cash of £120 for services billed in transaction (10).

ASSET = LIABILITIES
No =
CASH + ACC RECEIVABLE + SUPPLIES + EQUIPMENT ACC PAYABLE +
=
1 £ 10,000 + + + = +
2 -£ 5,000 + + + £ 5,000 = +
£ 5,000 + £ - + £ - + £ 5,000 = £ - +
3 -£ 400 + + + = +
£ 4,600 + £ - + £ - + £ 5,000 = £ - +
4 -£ 500 + + £ 500 + = +
£ 4,100 + £ - + £ 500 + £ 5,000 = £ - +
5 + + + = £ 250 +
£ 4,100 + £ - + £ 500 + £ 5,000 = £ 250 +
6 + £ 4,700 + + = +
£ 4,100 + £ 4,700 + £ 500 + £ 5,000 = £ 250 +
7 -£ 1,000 + + + = +
£ 3,100 + £ 4,700 + £ 500 + £ 5,000 = £ 250 +
8 -£ 1,000 + + + = +
£ 2,100 + £ 4,700 + £ 500 + £ 5,000 = £ 250 +
 9 -£ 140 + + + = +
£ 1,960 + £ 4,700 + £ 500 + £ 5,000 = £ 250 +
10 + £ 980 + + = +
£ 1,960 + £ 5,680 + £ 500 + £ 5,000 = £ 250 +
11 £ 120 + -£ 120 + + = +
£ 2,080 + £ 5,560 + £ 500 + £ 5,000 = £ 250 +
£ 13,140 = £
 EQUITY
RETAINED EARNINGS NOTED
SHARE CAPITAL +
REV - EXPENSES - DIVIDEN
£ 10,000 + - - Issued Shares
+ - - Equipment
£ 10,000 + £ - - £ - - £ -
+ - £ 400 - rent expense
£ 10,000 + £ - - £ 400 - £ -
+ - - Supplies increases
£ 10,000 + £ - - £ 400 - £ -
+ - £ 250 - advertising expense
£ 10,000 + £ - - £ 650 - £ -
+ £ 4,700 - - Service Revenue
£ 10,000 + £ 4,700 - £ 650 - £ -
+ - - £ 1,000 Dividends
£ 10,000 + £ 4,700 - £ 650 - £ 1,000
+ - £ 1,000 - Saleries Expense
£ 10,000 + £ 4,700 - £ 1,650 - £ 1,000
 + - £ 140 - Utillities Expense
£ 10,000 + £ 4,700 - £ 1,790 - £ 1,000
+ £ 980 - - Service Revenue
£ 10,000 + £ 5,680 - £ 1,790 - £ 1,000
+ - - receive from service repair
£ 10,000 + £ 5,680 - £ 1,790 - £ 1,000
13,140 Balance
 Kinney’s Repair Ltd.
Income Statment
For the Month Ended May 30

Revenues
Service revenue £5,680
Expenses
Rent expense £400
advertising expense £250
Saleries Expense £1,000
Utillities Expense £140
Total expenses £1,790
Net Income £3,890

Kinney’s Repair Ltd.

Retained Earnings Statement
For the Month Ended May 30

Retained earnings, May 1 £0

Add: Net Income £3,890
£3,890
Less: Dividends £1,000
Retained earnings, May 30 £2,890

Kinney’s Repair Ltd.

Statement of Financial Position
For the Month Ended May 30

Assets
Equipment £5,000
Supplies £500
Account receivable £5,560
Cash £2,080
Total assests £13,140

Equity and Liabilities

Equity
Share capital-ordinary £10,000
 Retained earnings £2,890 £12,890
Liabilities
Account payable £250
Total assests £13,140