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.

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Definitions:

Emotional States

The psychological condition of a person characterized by their current feelings and mood.

Social Norms

Shared standards of behavior that are considered acceptable within a group or society.

Social Interaction

The process by which individuals act and react in relation to others, influencing and being influenced by the behaviors, feelings, and thoughts of each other.

Culture

The shared beliefs, practices, norms, values, and artifacts that characterize a group of people or society.