Answer All 4 parts of this question!

Part 1:

Chapter 1 - Instruction #1

Peyton Smith enjoys listening to all types of music and owns countless CDs. Over the years, Peyton has gained a local reputation for knowledge of music from classical to rap and the ability to put together sets of recordings that appeal to all ages.

During the last several months, Peyton served as a guest disc jockey on a local radio station. In addition, Peyton has entertained at several friends parties as the host deejay.

On June 1, 20Y5, Peyton established a corporation known as PS Music. Using an extensive collection of music MP3 files, Peyton will serve as a disc jockey on a fee basis for weddings, college parties, and other events. During June, Peyton entered into the following transactions:

June 1. Deposited $4,000 in a checking account in the name of PS Music in exchange for common stock.

2. Received $3,500 from a local radio station for serving as the guest disc jockey for June.

2. Agreed to share office space with a local real estate agency, Pinnacle Realty. PS Music will pay one-fourth of the rent. In addition, PS Music agreed to pay a portion of the wages of the receptionist and to pay one-fourth of the utilities. Paid $800 for the rent of the office.

4. Purchased supplies from City Office Supply Co. for $350. Agreed to pay $100 within 10 days and the remainder by July 5, 20Y5.

6. Paid $500 to a local radio station to advertise the services of PS Music twice daily for two weeks.

8. Paid $675 to a local electronics store for renting digital recording equipment.

12. Paid $350 (music expense) to Cool Music for the use of its current music demos to make various music sets.

13. Paid City Office Supply Co. $100 on account.

16. Received $300 from a dentist for providing two music sets for the dentist to play for her patients.

22. Served as disc jockey for a wedding party. The father of the bride agreed to pay $1,000 in July.

25. Received $500 for serving as the disc jockey for a cancer charity ball hosted by the local hospital.

29. Paid $240 (music expense) to Galaxy Music for the use of its library of music demos.

30. Received $900 for serving as PS disc jockey for a local clubs monthly dance.

30. Paid Pinnacle Realty $400 for PS Musics share of the receptionists wages for June.

30. Paid Pinnacle Realty $300 for PS Musics share of the utilities for June.

30. Determined that the cost of supplies on hand is $170. Therefore, the cost of supplies used during the month was $180.

30. Paid for miscellaneous expenses, $415.

30. Paid $1,000 royalties (music expense) to National Music Clearing for use of various artists music during the month.

30. Paid dividends, $500.

Required:

Indicate the effect of each transaction and the balances after each transaction. Enter deductions and negative values (withdrawals and expenses) as negative numbers. For transactions occurring on the same date, enter in the order shown above.

Assets = Liabilities + Stockholders Equity

Cash

+

Accounts

Receivable

+

Supplies

=

Accounts

Payable

+ Common

Smith,

Stock

- Dividends

+

Fees

Earned

-

Music

Exp.

- Office

Rent

Exp.

- Equip.

Rent

Exp.

-

Advertising

Exp.

-

Wages

Exp.

-

Utilities

Exp.

-

Supplies

Exp.

-

Misc.

Exp.

Part 2:

Chapter 1 - Instruction #2

Refer to your answers from Chapter 1, Part 1 to complete this part.

Prepare an income statement for PS Music for the month ended June 30, 20Y5.

PS Music

Income Statement

For the Month Ended June 30, 20Y5

Fees Earned

$

Expenses:

Music Expense $

Office Rent Expense

Equipment Rent Expense

Advertising Expense

Wages Expense

Utilities Expense

Supplies Expense

Miscellaneous Expense

Total Expenses

Net Income

$

Part 3-

Chapter 1 - Instruction #3

Refer to your answers from Chapter 1, Parts 1 and 2 to complete this part.

Prepare a statement of stockholders equity for PS Music for the month ended June 30, 20Y5. If an amount box does not require an entry, leave it blank. If a net loss is incurred or there is a decrease in retained earnings, enter that amount as a negative number using a minus sign.

PS Music

Statement of Stockholders Equity

For the Month Ended June 30, 20Y5

Common Stock

Retained Earnings

Total

Balances, June 1, 20Y5

$

$

$

Issued common stock

Net income

Dividends

Balances, June 30, 20Y5

$

$

$

Part 4-

Continuing Problem

Chapter 1 - Instruction #4

Refer to your answers from Chapter 1, Parts 1 and 3 to complete this part.

Prepare a balance sheet for PS Music as of June 30, 20Y5.

PS Music

Balance Sheet

June 30, 20Y5

Assets

Cash

$

Accounts receivable

Supplies

Total Assets

$

Liabilities

Accounts payable

$

Stockholders' Equity

Common stock $

Retained earnings

Total stockholders equity

Total liabilities and stockholders' equity

$