Ned Walz started his own delivery service, Walz Service Inc., on June 1, 2014. The following transactions occurred during the month of June.

June 1 Stockholders invested $20,000 cash in the business in exchange for common stock.

2.Purchased a used van for deliveries for $10,000. Walz paid $2,000 cash and signed a note payable for the remaining balance.

3 Paid $600 for offce rent for the month.

5 Performed $3,000 of services on account.

9 Paid $300 in cash dividends.

12 Purchased supplies for $240 on account.

15 Received a cash payment of $1,000 for services performed on June 5.

17 Received a bill for $200 to cover advertisements in Tri-State News.

20 Received a cash payment of $1,500 for services performed.

23 Made cash payment of $1,000 on the note payable.

26 Paid $180 for utilities.

29 Paid for the supplies purchased on account on June 12.

30 Paid $750 for employee salaries.

Instructions

(a) Show the effects of the previous transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year.

Include margin explanations for any changes in Retained Earnings.
(b) Prepare an income statement for the month of June.
(c) Prepare a classified balance sheet at June 30,2014.

Transcribed Image Text:

Stockholders' Equity Assets Liabilities Accounts Notes Accounts Common Retained Earnings Date Cash + Receivable + Supplies + Equipment Payable + Payable + Stock + Revenues-Expenses-Dividends