Continuing Exercise This exercise is the first exercise in a sequence that begins an accounting cycle. The cycle is contin- ued in Chapter 2 and completed in Chapter 3. Sensations Salon, Inc., was opened by Sharmaine Crosswhite in her home and completed the following transactions during the month of May. May 1 Received $1,500 and issued 500 shares of common stock to Sharmaine Crosswhite. Deposited this amount in a bank account in the name of Sensations Salon, Inc. 3 Purchased on account styling chairs, $1,600, and professional clippers, $308. The equipment is expected to remain in service for three years. 5 Purchased $125 of supplies. Wrote check #1 from the new bank account. 6 Performed services for clients on account, $375. 17 28 30 Completed services for clients, received cash $275. Paid the utility bill, $65. Wrote check #2 from the new bank account. Received $150 on account from services performed on May 6. Requirement 1. Analyze the effects of Sensations Salon, Inc.'s transactions on the accounting equation. Include these headings: Cash, Accounts Receivable, Supplies, Equip- ment, Accounts Payable, Common Stock, Retained Earnings, Service Revenue, and Utilities Expense. Determine the ending balances in each account on May 31. In Chapter 2, we will account for these same transactions a different way-as the accounting is actually performed in practice.