PRACTICE PROBLEM

A group of student investors in Hong Kong opened Campus Laundromat Ltd$.$ on September

$1,2017.$ During the first month of operations, the following transactions occurred.

Sept. $1$ Shareholders invested HK $$200,000$ cash in the business in exchange for ordinary shares.

$2$ Paid HK $$10,000$ cash for store rent for the month of September.

$3$ Purchased washers and dryers for $HK$$$250,000,$ paying $HK$$$100,000$ in cash and signing a HK $$150,000,6-$month, $12\%$ note payable.

$4$ Paid HK $$12,000$ for a one$-$year accident insurance policy.

$10$ Received a bill from the Daily News for advertising the opening of the laundromat $HK$$$2,000.$

$20$ Declared and paid a cash dividend to shareholders HK $$7,000.$

$30$ Determined that cash receipts for laundry fees for the month were HK $$62,000.$

The chart of accounts for the company is the same as for Yazici Advertising A$..($Illustration $2-19$ on page $64)$ except for the following: No$.610$ Advertising Expense.