Union Inc. was organized on June 1, 2017, by two students majoring in education. The two entrepreneurs provided entertainment for children’s birthday parties to supplement their college career. The following transactions occurred during the first month of operations:

June 1: Received contribution of $6,000 from each of the two principal owners of the new business in exchange for shares of stock.
June 1: Purchased lighting equipment for $300 on an open account. The company has 30 days to pay for the equipment.
June 5: Registered as a vendor with the city and paid the $25 monthly fee.
June 9: Purchased an event tent to set up at parties for $2,400 cash.
June 10: Purchased $100 in miscellaneous supplies on account. The company has 30 days to pay for the supplies.
June 15: Paid a $75 bill from a local printer for advertisement signs.
June 17: Customers paid for services with cash of $1,500.
June 24: Billed the local park district $800 entertainment provided to a summer camp.
The park district is to pay one-half of the bill within five working days and the rest within 30 days.
June 29: Received 50% of the amount billed to the park district.
June 30: Customers paid cash for parties of $2,000.
June 30: Paid cash wages of $300 to a friend who helped over the weekend.
June 30: Paid the balance due on the supplies.
1. Prepare a table to summarize the preceding transactions as they affect the accounting
equation. Use the following format. Identify each transaction with the date.

2.Prepare an income statement for the month ended June 30,2017.
3.Prepare a classified balance sheet at June 30,2017.
4.Why do you think the two students decided to incorporate their business rather than operate it as a partnership?

Question

Union Inc. was organized on June 1, 2017, by two students majoring in education. The two entrepreneurs provided entertainment for children’s birthday parties to supplement their college career. The following transactions occurred during the first month of operations:

June 1: Received contribution of $6,000 from each of the two principal owners of the new business in exchange for shares of stock.
June 1: Purchased lighting equipment for $300 on an open account. The company has 30 days to pay for the equipment.
June 5: Registered as a vendor with the city and paid the $25 monthly fee.
June 9: Purchased an event tent to set up at parties for $2,400 cash.
June 10: Purchased $100 in miscellaneous supplies on account. The company has 30 days to pay for the supplies.
June 15: Paid a $75 bill from a local printer for advertisement signs.
June 17: Customers paid for services with cash of $1,500.
June 24: Billed the local park district $800 entertainment provided to a summer camp.
The park district is to pay one-half of the bill within five working days and the rest within 30 days.
June 29: Received 50% of the amount billed to the park district.
June 30: Customers paid cash for parties of $2,000.
June 30: Paid cash wages of $300 to a friend who helped over the weekend.
June 30: Paid the balance due on the supplies.
1. Prepare a table to summarize the preceding transactions as they affect the accounting
equation. Use the following format. Identify each transaction with the date.

2.Prepare an income statement for the month ended June 30,2017.
3.Prepare a classified balance sheet at June 30,2017.
4.Why do you think the two students decided to incorporate their business rather than operate it as a partnership?

Quizplus · Accepted Answer

The Answer of Union Inc. was organized on June 1, 2017, by two students majoring in education. The two entrepreneurs provided entertainment for children’s birthday parties to supplement their college career. The following transactions occurred during the first month of operations:

June 1: Received contribution of $6,000 from each of the two principal owners of the new business in exchange for shares of stock.
June 1: Purchased lighting equipment for $300 on an open account. The company has 30 days to pay for the equipment.
June 5: Registered as a vendor with the city and paid the $25 monthly fee.
June 9: Purchased an event tent to set up at parties for $2,400 cash.
June 10: Purchased $100 in miscellaneous supplies on account. The company has 30 days to pay for the supplies.
June 15: Paid a $75 bill from a local printer for advertisement signs.
June 17: Customers paid for services with cash of $1,500.
June 24: Billed the local park district $800 entertainment provided to a summer camp.
The park district is to pay one-half of the bill within five working days and the rest within 30 days.
June 29: Received 50% of the amount billed to the park district.
June 30: Customers paid cash for parties of $2,000.
June 30: Paid cash wages of $300 to a friend who helped over the weekend.
June 30: Paid the balance due on the supplies.
1. Prepare a table to summarize the preceding transactions as they affect the accounting
equation. Use the following format. Identify each transaction with the date.

2.Prepare an income statement for the month ended June 30,2017.
3.Prepare a classified balance sheet at June 30,2017.
4.Why do you think the two students decided to incorporate their business rather than operate it as a partnership?

Union Inc Was Organized on June 1, 2017, by Two Students