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Q 3) Bill Phinnes...

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Accounting

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Q 3) 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. (5 marks) Transactions 1 . Issued ordinary shares in exchange for $70,000 cash on June 1 . 2. Purchased laundry supplies for $6,200 cash. 3. Purchased laundry equipment for $8,000 paying S3,000 in cash and the remainder due in 30 days. 4. Paid salaries of $8000 to student workers. 5. Received a bill from College News for $1200 for advertising in the campus newspaper. 6. Cash receipts from customers for cleaning and laundry amounted to $10,500. 7. Paid dividends of $700. 8. Billed the Lion Soccer Team $2000 for cleaning and laundry services 9. Paid $300 to Col llege News for advertising that was previously billed in Transaction 5. 10. Incurred utility expenses for month on account, $1150

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