On June 1, 1999, Richard Cross opened a swimming pool cleaning and maintenance service. Cross Pool Company. He vaguely recalled the process of making journal entries and establish- ing ledger accounts from a high school bookkeeping course he had taken some years ago. At the end of June, he prepared an income statement for the month of June, but he had the feeling that he had not proceeded correctly. He contacted his brother. John, a recent college graduate with a major in accounting, for assistance. John immediately noted that his brother had kept his records on a cash basis. pg85

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June Received cash of $28.000 from various customers in exchange for service agreements to clean and maintain their pools for June, July, August, and September. 5 Paid rent for automotive and cleaning equipment to be used during the period June through September. $8,000. The payment covered the entire period. 8 Purchased a two-year liability insurance policy effective June 1 for $12.000 cash. 10 Received an advance of $9,000 from a Florida building contractor in exchange for an agreement to help service pools in his housing development during October through May.