This question concerns the items and the amounts that two entities. City of Regina and Public Health Organization, Inc. (PHO), should report in their financial statements.

During August, PHO provided City of Regina with medical checks for new school pupils and sent the City a bill for \(\$ 30,000\). On September 7 , Regina sent a cheque to \(\mathrm{PHO}\) for \(\$ 25,000\). The City began August with a cash balance of \(\$ 50,000\); PHO began with cash of \(\$ 0\).

{Requirements}

1. Specify everything that both Regina and \(\mathrm{PHO}\) will report on their August and September income statements and on their balance sheets at August 31 and September 30 in connection with the above transactions between them.

2. Briefly explain how the City of Regina and PHO data relate to each other. Be specific.