You start a cleaning service business on May 1, Year 1, Cleaning Services Inc., and had the below noted transactions during the first month of business. 1. The owner invests $5,000 of cash into a business. 2. You borrow $2,500 from your parents to help start the business. The loan is for 2 years, interest free. 3. Registered a business name with Service Ontario, $60, using a credit card. 4. Set up a business bank account with Royal Bank. The bank will withdraw $24.99 out of the account at the end of every month. 5. Paid $1,700 cash to have a website developed which allows customers to schedule appointments and submit payments. 6. You pay a $14.99 website fee every month, on the first day of the month. You pay using your credit card. 7. Purchase a Dyson DC37 Turbinehead Animal vacuum cleaner for $599.99, plus HST. This vacuum is specifically developed to remove pet hair and dander. Also purchased the Dyson DC37 Tool Kit for $131.97, plus HST, which is used to repair and maintain the vacuum. Paid by credit card. 8. Purchased a 1 year insurance policy for $1,800, plus 8% sales tax, paying cash. 9. Purchased cleaning supplies for $480, plus HST, using a credit card. 10. Purchased 1,000 flyers advertising your cleaning services, $189, plus HST, using a credit card. 11. Develop a Facebook page to advertise your services. Your page directs potential customers to your website. 12. Hired a local teen to deliver 500 of the flyers throughout Oakville, $250 cash. 13. You will use you own car to travel to your customers. You can deduct the business portion of all your car expenses (gas, oil, insurance, licence and registration, and maintenance and repairs). To help you track you business usage you purchases MileIQ, an iPhone app which tracks mileage, for $59.99 plus HST, using a credit card. 14. Received payment through the website, paid directly into your bank account, from customers for cleaning services provided, $1,730. 15. You determine that, by the end of month, you only have $375 of your cleaning supplies remaining.2 | P a g e 16. MileIQ shows that you have travelled 1,650 kilometres over the last month, 1,000 for business. Total vehicle expenses paid for the month are $286.00 and you pay cash out of the business's bank account for the business portion. 17. You used your cell phone 80% for business. Your monthly phone charge is $192 (taxes included). You pay the business portion directly from your business bank account. 18. By the end of the month you had used up 1 month of the insurance. 19. Paid $1,500 towards your credit card charges using cash from the business bank account. 20. Online you see that Royal Bank has charged the business account the monthly service fee. 21. You record the income tax you expect to pay, equal to 25% of your profit before taxes. Required: A. Analyze the transactions using the critical and enhancing questions and record the business activities using the expanded accounting equation and account names. A chart is provided on the next page. B. Produce the income statement, statement of retained earnings, and balance sheet for your first month of operations