Bill Phinnes decides to open a cleaning and laundry service near the local college campus that will operate as a sole proprietorship. 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 owner's equity.
Transactions
(1) Bill Phinnes invests $20,000 in cash to start a cleaning and laundry business on June 1.
(2) Purchased laundry equipment for $5,000 paying $3,000 in cash and the remainder due in 30 days.
(3) Purchased laundry supplies for $1,200 cash.
(4) Received a bill from College News for $300 for advertising in the campus newspaper.
(5) Cash receipts from customers for cleaning and laundry amounted to $1,500.
(6) Paid salaries of $200 to student workers.
(7) Billed the Lion Soccer Team $200 for cleaning and laundry services.
(8) Paid $300 to College News for advertising that was previously billed in Transaction 4.
(9) Bill Phinnes withdrew $900 from the business for living expenses.
(10) Incurred utility expenses for month on account, $400.

Question

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The Answer of Bill Phinnes decides to open a cleaning and laundry service near the local college campus that will operate as a sole proprietorship. 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 owner's equity.
Transactions
(1) Bill Phinnes invests $20,000 in cash to start a cleaning and laundry business on June 1.
(2) Purchased laundry equipment for $5,000 paying $3,000 in cash and the remainder due in 30 days.
(3) Purchased laundry supplies for $1,200 cash.
(4) Received a bill from College News for $300 for advertising in the campus newspaper.
(5) Cash receipts from customers for cleaning and laundry amounted to $1,500.
(6) Paid salaries of $200 to student workers.
(7) Billed the Lion Soccer Team $200 for cleaning and laundry services.
(8) Paid $300 to College News for advertising that was previously billed in Transaction 4.
(9) Bill Phinnes withdrew $900 from the business for living expenses.
(10) Incurred utility expenses for month on account, $400.

Bill Phinnes Decides to Open a Cleaning and Laundry Service