Ken Stone launched a new business, Ken’s Maintenance Co., that began operations on June 1. The following transactions were completed by the company during that first month:

June 1 K. Stone invested $120,000 cash in the business.

2 Rented a furnished office and paid $4,500 cash for June’s rent.

4 Purchased $2,400 of equipment on credit.

6 Paid $1,125 cash for the next week’s advertising of the opening of the business.

8 Completed maintenance services for a customer and immediately collected $750 cash.

14 Completed $6,300 of maintenance services for First Union Center on credit.

16 Paid $900 cash for an assistant’s salary for the first half of the month.

20 Received $6,300 cash payment for services completed for First Union Center on June 14.

21 Completed $3,500 of maintenance services for Skyway Co. on credit.

24 Completed $825 of maintenance services for Comfort Motel on credit.

25 Received $3,500 cash payment from Skyway Co. for the work completed on June 21.

26 Made payment of $2,400 cash for the equipment purchased on June 4.

28 Paid $900 cash for an assistant’s salary for the second half of this month.

29 K. Stone withdrew $2,000 cash for personal use.

30 Paid $120 cash for this month’s telephone bill.

30 Paid $525 cash for this month’s utilities.

Required

1 . Arrange the following asset, liability, and equity titles in a table like Exhibit 1.9. Cash, Accounts Receivable; Equipment; Accounts Payable; K. Stone, Capital; K. Stone, Withdrawals; Revenues; and Expenses.

2. Show the effects of the transactions on the accounts of the accounting equation by recording increases and decreases in the appropriate columns. Do not determine new account balances after each transaction. Determine the final total for each account and verify that the equation is in balance.

3. Prepare a June income statement, a June statement of owner’s equity, a June 30 balance sheet, and a June statement of cash flows.