1. Corporation was formed on June20X0, when some stockholders invested $100,000 in cash in the company. During the first week of June, the company spent $85,000 cash for merchandise inventory (sportswear). During the remainder of the month, total sales reached $115,000, of which $70,000 was on open account. The cost of the inventory sold was $60,000. For simplicity, assume that no other transactions occurred except that on June 28, R. J. Sen Corporation acquired $34,000 additional inventory on open account.

Requirements

1.	By using the balance sheet equation approach, analyze all transactions for June.
2.	Prepare a balance sheet for June30, 20X0
3.	Prepare two statements for June, side by side. The first should use the accrual basis of accounting to compute net income, and the second, the cash basis to compute the difference between cash inflows and cash outflows. Which basis provides a more informative measure of economic performance? Why?

Requirement 1. By using the balance sheet equation approach, analyze all transactions for

JuneJune.

Enter the events into

R. J. SenR. J. Sen

Company's accounting equation one transaction at a time. For the sale of inventory, record the revenue from the sale, and then, in the next step, record the cost of the sale. One you have entered all of the events into the accounting equation, calculate the ending balance of each account.