BUS 101

Accounting Basics: Impact of Business Transactions on B/S & I/S

Comprehensive Accounting Cycle Problem

In June, Wendy Winger organized a corporation to provide aerial photography services. The company, called Aerial Views, began operations immediately. The business transactions are shown below:

June 1	The corporation issued 60,000 shares of capital stock to Wendy Winger in exchange for $60,000 cash
June 4	Purchased a plane from utility Aircraft for $220,000. A cash payment of $40,000 was made at the time of the purchase, and a note payable was issued for the remaining balance.
June 5	Issued 40,000 shares of capital stock to new shareowner in exchange for $40,000 cash.
June 9	Paid Woodrow Airport $2500 to rent office and hangar space for the month.
June 15	Billed customers $8320 for aerial photographs taken during first half of June.
June 15	Paid $5880 in salaries earned by employees during the first half of June.
June 24	Paid Hannigans Hangar $1890 for maintenance and repair services on the company plane.
June25	Collected $4910 of the amounts billed to customers on June 15th.
June 30	Billed customers $16450 for aerial photographs taken during the second half of the month.
June 30	Paid $6000 in salaries earned by employees during the second half of the month.
June 30	Received a $2510 bill from Peatree Petroleum for aircraft fuel purchased in June. The entire amount is due July 10th.
June 30	Recorded depreciation expense of $1500 on company plane.
June 30	Declared and paid a $2000 dividend.

Required:

2. Prepare an Income Statement in good form.