Pink Floyd decides to open a pizza parlor near the local college campus that will operate as a corporation. Analyze the following transactions for the month of June in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing () the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in stockholders equity.

Transactions

(1) Pink Floyd invests $45,000 cash in exchange for common stock to start a pizza parlor business on June 1.

(2) Purchased equipment for $10,000 paying $4,000 in cash and the remainder due in 30 days.

(3) Purchased supplies for $2,500 cash.

(4) Received a bill from Campus News for $500 for advertising in the campus newspaper.

(5) Cash receipts from customers for pizza sales amounted to $1,500.

(6) Paid salaries of $400 to employees.

(7) Billed the Tiger Football Team $450 for pizzas ordered.

(8) Paid $500 to Campus News for advertising that was previously billed in Transaction 4.

(9) Pink Floyd was paid dividends of $1,200.

(10) Incurred utility expenses for month on account, $250.

Trans- Accounts Accounts Common Retained

action Cash + Receivable + Supplies + Equipment = Payable + Stock + Earnings

(1)

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Balance

(2)

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Balance

(3)

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Balance

(4)

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Balance

(5)

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Balance

(6)

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Balance

(7)

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Balance

(8)

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Balance

(9)

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Balance

(10)

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Totals