Reference no: EM132637429

Question - Bill Phinnes decides to open a cleaning and laundry service near the local college campus that will operate as a corporation. Analyze the following transactions for the month of June in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in equity.

Transactions -

(1) Issued ordinary shares in exchange for $20,000 cash on June 1.

(2) Purchased laundry equipment for $5,000 paying $3,000 in cash and the remainder due in 30 days.

(3) Purchased laundry supplies for $1,200 cash.

(4) Received a bill from College News for $300 for advertising in the campus newspaper.

(5) Cash receipts from customers for cleaning and laundry amounted to $1,500.

(6) Paid salaries of $200 to student workers.

(7) Billed the Lion Soccer Team $200 for cleaning and laundry services.

(8) Paid $300 to College News for advertising that was previously billed in Transaction 4.

(9) Paid dividends of $700.

(10) Incurred utility expenses for month on account, $150.