# Balance Sheet

Balance Sheet

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The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton.

 Assets = Liab. + Owner’s Equity Cash + Accts. Rec. + Supp. + Equip. = Accts. Pay. + T.Cotton, Capital + Rev. − Exp. Balances, May 1 14,600 + 2,600 + 5,400 + 33,400 = 6,600 + 49,400 + 0 − 0 Paid for utilities − 940 + 940 New balances 13,660 + 2,600 + 5,400 + 33,400 = 6,600 + 49,400 + 0 − 940 Sold services for cash + 4,940 + 4,940 New balances 18,600 + 2,600 + 5,400 + 33,400 = 6,600 + 49,400 + 4,940 − 940 Paid a creditor − 1,900 − 1,900 New balances 16,700 + 2,600 + 5,400 + 33,400 = 4,700 + 49,400 + 4,940 − 940 Sold services on credit + 2,700 + 2,700 New balances 16,700 + 5,300 + 5,400 + 33,400 = 4,700 + 49,400 + 7,640 − 940 Paid salaries − 8,700 + 8,700 New balances 8,000 + 5,300 + 5,400 + 33,400 = 4,700 + 49,400 + 7,640 − 9,640 Paid telephone bill − 310 + 310 New balances 7,690 + 5,300 + 5,400 + 33,400 = 4,700 + 49,400 + 7,640 − 9,950 Withdrew cash for personal expenses − 2,600 − 2,600 New balances 5,090 + 5,300 + 5,400 + 33,400 = 4,700 + 46,800 + 7,640 − 9,950

Required:
Analyze each transaction carefully. Prepare an income statement and a statement of owner’s equity for the month. Prepare a balance sheet for May 31, 2019.

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