On June 1, a group of bush pilots in Thunder Bay, Ontario, Canada, formed the Thunder Fly-In Service, Inc., by selling \(\$ 80,000\) of common stock for cash. The group then leased several amphibious aircraft and docking facilities, equipping them to transport campers and hunters to outpost camps owned by various resorts. The following transactions occurred during June:

1 Sold common stock for cash, \(\$ 80,000\).

2 Paid June rent for aircraft, dockage, and dockside office, \(\$ 4,250\).

3 Received invoice for the cost of a reception the firm gave to entertain resort owners, \(\$ 1,600\).

4 Paid for June advertising in various sports magazines, \(\$ 800\).

5 Paid insurance premium for June, \(\$ 1,800\).

6 Rendered fly-in services for various groups for cash, \(\$ 26,500\).

7 Billed the Canadian Ministry of Natural Resources for transporting mapping personnel, \(\$ 1,900\), and billed various firms for fly-in services, \(\$ 14,000\).

8 Paid \(\$ 1,500\) on accounts payable.

9 Received \(\$ 13,200\) on account from clients.

10 Paid June wages, \(\$ 21,000\).

11 Received invoice for the cost of fuel used during June, \(\$ 3,500\).

12 Paid a cash dividend, \(\$ 4,000\).

Required

a. Set up an accounting equation in columnar form with the following column headings: Cash, Accounts Receivable, Accounts Payable, Common Stock, and Retained Earnings.

b. Show how the June transactions affect the items in the accounting equation, and total all columns to show that assets equal liabilities plus stockholders' equity as of June 30. Revenues, expenses, and dividends affect Retained Earnings.