Neko Case Decides to Open a Cleaning and Laundry Service

question 7

Essay

Neko Case 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 stockholders' equity.
Transactions
(1) Issued stock in exchange for $20,000 cash on June 1.
(2) Purchased equipment for $5,000 paying $3,000 in cash and the remainder due in 30 days.
(3) Purchased 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 $2,400.
(6) Paid salaries of $600 to student workers.
(7) Billed the Lion Soccer Team $450 for cleaning and laundry services.
(8) Paid $300 to College News for advertising that was previously billed in Transaction 4.
(9) Paid dividends of $1,200.
(10) Incurred utility expenses for month on account, $500.

---

Definitions:

Nominal Data

Data categorized into distinctly named groups without any natural order or ranking among them.

Chi-Squared Test

A statistical hypothesis test used to determine whether there is a significant difference between the expected frequencies and the observed frequencies in one or more categories.

Expected Values

The mean of a probability distribution, representing the average outcome one expects to see if an experiment is repeated many times.

Sports Preference

Individuals' inclination or enjoyment towards specific sports, reflecting personal choices or cultural influences.