Dawn Ivy, a junior in college, has been seeking ways to earn extra spending money. As an active sports enthusiast, Dawn plays tennis regularly at the Racquet Club, where her family has a membership. The president of the club recently approached Dawn with the proposal that she manage the club's tennis courts. Dawn's primary duty would be to supervise the operation of the club's four indoor and six outdoor courts, including court reservations. In return for her services, the club would pay Dawn $150 per week, plus Dawn could keep whatever she earned from lessons and the fees from the use of the ball machine. The club and Dawn agreed to a one-month trial, after which both would consider an arrangement for the remaining two years of Dawn's college career. On this basis, Dawn organized Deuce. During June 2005, Dawn managed the tennis courts and entered into the following transactions:

a. Opened a business account by depositing $1,000.

b. Paid $320 for tennis supplies (practice tennis balls, etc.).

c. Paid $160 for the rental of videotape equipment to be used in offering lessons during June.

d. Arranged for the rental of two ball machines during September for $200. Paid $140 in advance, with the remaining $60 due July 1.

e. Received $1,600 for lessons given during June.

f. Received $300 in fees from the use of the ball machines during June.

g. Paid $600 for salaries of part-time employees who answered the telephone and took reservations while Dawn was giving lessons.

h. Paid $150 for miscellaneous expenses.

i. Received $600 from the club for managing the tennis courts during June.

j. Determined that the cost of supplies on hand at the end of the month totaled $150; therefore, the cost of supplies used was $170.

k. Withdrew $800 for personal use on June 30.

As a friend and accounting student, you have been asked by Dawn to aid her in assessing the venture.

1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

Explain the nature of each increase and decrease in owner's equity by an appropriate notation at the right of the amount.
2. Prepare an income statement for June.
3. Prepare a statement of owner's equity for June.
4. Prepare a balance sheet as of June 30.
5. a. Assume that Dawn Ivy could earn $8 per hour working 30 hours as a waitress.
Evaluate which of the two alternatives, working as a waitress or operating Deuce, would provide Dawn with the most income per month.
b. Discuss any other factors that you believe Dawn should consider before discussing a long-term arrangement with the RacquetClub.

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AssetsLiabilities Owners Equity + Owner's Equity CashSupplies Accounts Payable Dawn vy, Capital