Android Studio Error: org.gradle.process.internal.ExecException

I am new to android development and have hit my first error and can't seem to get around it. I have downloaded and installed android studio and java on my mac and a made a dummy app just to see it run in the simulator. The default hello world app runs fine but as soon as I add a .png file to my drawable folder, I get this error:

Error:Error: com.android.ide.common.process.ProcessException:    org.gradle.process.internal.ExecException: Process 'command '/Users/billy/Library/Android/sdk/build-tools/21.1.2/aapt'' finished with non-zero exit value 42

I few things to mention are that I only see one drawable folder, not the normal drawable-hdpi,mdpi, etc that I see in many tutorials.

Appreciate the help.