On June 1, Leanne Aiken established Leanne's Travel Agency. The following transactions are for her first month of operations:
June 1 Deposited $23,000 in the agency's bank account at the Scotia bank.
2 Purchased equipment for $6,800, paying $3,000 cash and signing a note payable for the balance.
3 Paid rent for the month, $2,500.
7 Paid $675 for supplies.
8 Incurred $300 of advertising expense, on account.
15 Earned $11,000 for services provided, with $3,500 paid in cash and the remainder on account.
22 Withdrew $1,500 for personal use.
25 Paid the amount due in the June 8 transaction.
30 Paid employee salaries, $5,750.
30 Received a bill for utilities for the month, $300.
30 Received $6,000 from customers who were billed in the June 15 transaction.
30 Paid $2,400 for a one-year insurance policy, starting July 1.
Instructions
(a) Prepare a tabular analysis of the effects of the above transactions on the accounting equation.
(b) From an analysis of the owner's equity, calculate the account balance in L. Aiken, Capital, at June 30.
TAKING IT FURTHER Assume on June 30 there is $300 of supplies on hand and that $375 of supplies had been used during June. What amount should be reported as an asset, Supplies, on the June 30 balance sheet? What amount should be reported as an expense?