In June 2011 Wendy Winger organized a corporation to provide aerial photography services. The company called Aerial Views began operations…

    In June 2011 Wendy Winger 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 60000 shares of capital stock to Wendy Winger in exchange for $60000 cash.
    June 2 Purchased a plane from Utility Aircraft for $220000. Made a $40000 cash down payment and issued a note payable for the remaining balance.
    June 4 Paid Woodrow Airport $2500 to rent office and hangar space for the month.
    June 15 Billed customers $8320 for aerial photographs taken during the first half of June.
    June 15 Paid $5880 in salaries earned by employees during the first half of June.
    June 18 Paid Hannigans Hangar $1890 for maintenance and repair services on the company plane.
    June 25 Collected $4910 of the amounts billed to customers on June 15.
    June 30 Billed customers $16450 for aerial photographs taken during the second half of the month.
    June 30 Paid $6000 in salaries earned by employees during the second half of the month.
    June 30 Received a $2510 bill from Peatree Petroleum for aircraft fuel purchased in June. The entire amount is due July 10.
    June 30 Declared a $2000 dividend payable on July 15.
    The account titles used by Aerial Views are:
    Cash
    Accounts Receivable
    Aircraft
    Notes Payable
    Accounts Payable
    Dividends Payable
    Capital Stock
    Retained Earnings
    Dividends
    Aerial Photography Revenue
    Maintenance Expense
    Fuel Expense
    Salaries Expense
    Rent Expense
    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 answers in tabular form using the column headings shown. Use I for increase D for decrease and NE for no effect. The June 1 transaction is provided for you:
    Income Statement Balance Sheet
    Transaction Revenue – Expenses = Net Income Assets = Liabilities + Owners Equity
    June1 NE NE NE I NE I
    B. Prepare journal entries (including explanations) for each transaction.
    C. Post each transaction to the appropriate ledger accounts (use a running balance format)
    D. Prepare a trial balance dated June 30 2011.
    E. Using figures from the trial balance prepared in part d compute total assets total liabilities and owners equity. Are these the figures that the company will report in its June 30 balance sheet? Explain your answer briefly.

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