The Following Transactions Occurred During June Year 1:
June $\quad$

question 227

Essay

The following transactions occurred during June Year 1:
June 1 $\quad$ The company purchased a service truck for $\$ 25,500$ , paying $\$ 5,500$ now and issuing a note payable for the balance; the note is due in monthly installments of $\$ 500$ plus $10 \%$ interest on the unpaid principal balance.

June 8 $\quad$ The company performed services of $\$ 30,400$ . It received $\$ 6,400$ cash from customers and $\$ 24,000$ for customers billed for completed services.

June 22 $\quad$ The company issued common shares in exchange for land having a fair value of $\$ 70,000$

June 30 $\quad$ The company received an invoice for $\$ 2,400$ from the company's advertising agency for radio and television ads which were run during the month; the invoice is due in 30 davs.

-Refer to Hatcher Tool Service.Indicate the economic effects of each transaction above on the accounting equation.Use the following format for your answers.Show the dollar amounts in the appropriate columns and use a plus (+)sign to indicate an increase and a minus (-)sign to indicate a decrease.

Calculate the sales volume needed to attain a specific target profit.

Assess the financial viability of spending on advertising based on its potential to increase sales.

Understand the calculation and significance of the margin of safety percentage.

Recognize the effect of sales mix shifts on the break-even point.

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Definitions:

Product Differentiation

The process by which companies distinguish their products or services from others in the market to attract a specific target audience.

Perfect Competition

A market structure characterized by a large number of small firms, identical products, free entry and exit, and perfect information, leading to efficient outcomes.

Peak Efficiency

The state of operating at maximum productivity with minimal waste and expense.

American Business Firms

Companies operating in the United States, engaged in commercial, industrial, or professional activities.