90.2K

Verified Solution

Link Copied!

In June 2020, Shalimar organized a corporation to provide aerial photography services. The company, called Aerial Views, began operations immediately. Transactions during the month of June were as follows: June 1 The corporation issued 70,000 shares of capital stock to Wendy Winger in exchange for $140,000 cash. June 2 Purchased a plane from Utility Aircraft for $240,000. Made a $40,000 cash down payment and issued a note payable for the remaining balance. June 4 Paid Woodrow Airport $2,200 to rent office and hangar space for the month. June 15 Billed customers $8,520 for aerial photographs taken during the first half of June. June 15 Paid $6,880 in salaries earned by employees during the first half of June. June 18 Paid Hannigans Hangar $1,990 for maintenance and repair services on the company plane. June 25 Collected $4,900 of the amounts billed to customers on June 15. June 30 Billed customers $17,450 for aerial photographs taken during the second half of the month. June 30 Paid $7,000 in salaries earned by employees during the second half of the month. June 30 Received a $2,500 bill from Peatree Petroleum for aircraft fuel purchased in June. The entire amount is due July 10. June 30 Declared a $2,100 dividend payable on July 15.

Instructions a. Analyze the effects that each of these transactions will have on the following six components of the companys financial statements for the month of June. Organize your answer in tabular form, using the column headings shown. Use I for increase, D for decrease, and NE for no effect. b. Prepare journal entries (including explanations) for each transaction. c. Post each transaction to the appropriate ledger accounts (use a running balance ledger accounts. d. Prepare a trial balance dated June 30, 2020

Answer & Explanation Solved by verified expert

See Answer