M $3\mathrm{.}4$A

unting Cycle: ing, Posting, and g a Trial Balance

June $1$ The corporation issued $60,000$ shares of capital stock to Wendy Winger in exchange for $$60,000$ cash.

June $2$ Purchased a plane from Utility Aircraft for $$220,000.$ Made a $$40,000$ cash down payment and issued a note payable for the remaining balance.

June $4$ Paid Woodrow Airport $$2,500$ to rent office and hangar space for the month.

June $15$ Billed customers $$8,320$ for aerial photographs taken during the first half of June.

June $15$ Paid $$5,880$ in salaries earned by employees during the first half of June.

June $18$ Paid Hannigan's Hangar $$1,890$ for maintenance and repair services on the company plane.

June $25$ Collected $$4,910$ of the amounts billed to customers on June $15.$

June $30$ Billed customers $$16,450$ for aerial photographs taken during the second half of the month.

June $30$ Paid $$6,000$ in salaries earned by employees during the second half of the month.

June $30$ Received a $$2,510$ bill from Peatree Petroleum for aircraft fuel purchased in June. The entire amount is due July $10.$

June $30$ Declared and paid a $$2,000$ dividend to the company's stockholders $($use the Dividends account$).$

The account titles used by Aerial Views are

Cash

Accounts Receivable

Aircraft

Notes Payable

Accounts Payable

Retained Earnings

Capital Stock

Dividends

Aerial Photography Revenue

Maintenance Expense

Fuel Expense

Salaries Expense

Rent Expense

Instructions

a$.$ Analyze the effects that each of these transactions will have on the following six components of the company's financial statements for the month of June. Organize your answer 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.

$\backslash$table$[[,$Income Statement,,Balance Sheet$],[$Transaction$,$Revenue $-$ Expenses $=$ Net Income,,Assets $=$ Liabilities $+$ Owners' Equity,,$],[$June $1,$NE$,$NE$,$NE$,,$NE$]]$

Problem Set A

$133$

b$.$ Prepare journal entries $($including explanations$)$ for each transaction.

c$.$ Post each transaction to the appropriate ledger accounts $($use a running balance format as illustrated in Exhibit $3-4).$

d$.$ Prepare a trial balance dated June $30,$ current year.