In June, Arial Earhart organized a corporation to provide aerial photography ser

Question

In June, Arial Earhart organized a corporation to provide aerial photography services. The company, called Arial Views, began operations immediately. The business transactions are shown below: The corporation issued 70,000 shares of capital stock to Arial Earhart in exchange for $70,000 cash Purchased a plane from Expo Aircraft for $230,000. A cash payment of $50,000 was made at the time of the purchase, and a note payable was issued for the remaining balance Issued 40,000 shares of capital stock to a new shareowner in exchange for $40,000 cash Paid Wilson Airport $2,600 to rent office and hangar space for the month Billed customers $8,320 for aerial photographs taken during first half of June Paid $5,880 in salaries earned by employees during the first half of June Paid Harry's Hangar $1,780 for maintenance and repair services on the company plane Collected $4,9p0 of the amounts billed to customers on June 15th Billed customers $16,500 for aerial photographs taken during the second half of the month Paid $5,000 in salaries earned by employees during the second half of the month Received a $2,500 bill from Petro Petroleum for aircraft fuel purchased in June The entire amount is due July 10th Recorded depreciation expense of $1,500 on company plane Declared and paid a $2,000 dividend June 1 June 4 June 5 une 9 June 15 June 15 June 24 June25 June 30 June 30 June 30 June 30 June 30

Explanation / Answer

a.

b. In the books of Arial Views:

d.

e.

f.

g.

Income Statement Balance Sheet Date Revenues - Expenses = NI Assets = Liabilities + O/ Equity 6/1 NE NE 70,000 NE 70,000 6/4 NE NE 230,000 - 50,000 180,000 6/5 NE NE 40,000 NE 40,000 6/9 NE (2,600) ( 2,600) NE (2,600) 6/15 8,320 NE 8,320 NE 8,320 6/15 NE (5,880) (5,880) NE (5,880) 6/24 NE (1,780) (1,780) NE (1,780) 6/25 NE NE 4,900 - 4,900 NE NE 6/30 16,500 NE 16,500 NE 16,500 6/30 NE (5,000) (5,000) NE (5,000) 6/30 NE (2,500) NE 2,500 (2,500) 6/30 NE (1,500) (1,500) NE (1,500) 6/30 NE NE (2,000) NE (2,000) Totals 24,820 19,260 5,560 296,060 182,500 113,560

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