Taki Yamamoto owns a video arcade business called Arcadia. Taki has hired your accounting firm to record Arcadia’s financial information. Taki hands you a folder containing these documents:

• Canceled checks with June dates: $800 for rent, $120 for electricity, $70 for telephone service, $180 for insurance, $250 for newspaper advertising, and $200 for a cleaning service.

• Invoice dated June 16 for a used video game sold on account for $2,000.

• Cash register tapes for June showing total cash sales of $5,890.

INSTRUCTIONS

1. Using the preceding information, make a list of accounts needed to record the transactions indicated by the financial documents Taki has given you.

2. Prepare an income statement for Arcadia for the month of June.