Accounting I

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CH1-Part 2

ACCT2301 PRINCIPLES OF ACCOUNTING I - Fall 2023
WEEK 2 - Homework Assignment (CH1)
Assignment due by Sunday, August 27, 2023
Peyton Smith Music
Peyton Smith enjoys listening to all types of music and owns countless CDs. Over the years, Peyton has gained a local reputation for knowledge of music from
classical to rap and the ability to put together sets of recordings that appeal to all ages.
During the last several months, Peyton served as guest disc jockey on a local radio station. In addition, Peyton has entertained at several friends' parties as the
host deejay. On June 1, 20Y5, Peyton established a corporation known as PS Music. Using an extensive collection of music MP3 files, Peyton will serve as a
disc jockey on a fee basis for weddings, college parties, and other events. During June, Peyton entered into the following transactions:
1-Jun Deposited $4,000 in a checking account in the name of PS Music in exchange for common stock
2-Jun Received $3,500 from a local radio station for serving as the guest disc jockey for June
2-Jun Agreed to share office space with local real estate agency, Pinnacle Realty. PS Music will pay one-fourth of the rent. In addition, PS Music
agreed to pay a portion of the eages of the receptionist and to pay on-fourth of the utilities. Paid $800 for the rent of the office.
4-Jun Purchased supplies from City Office Supply Co. for $350. Agreed to pay $100 within 10 days and the remainder by July 5, 20Y5.
6-Jun Paid $500 to a local radio station to advertise the services of PS Music twice daily for two weeks.
8-Jun Paid $675 to local electronics store for renting digital recording equipment.
12-Jun Paid $350 (music expense) to Cool Music for the use of its current music demos to make various music sets.
13-Jun Paid City Office Supply Co. $100 on account.
16-Jun Received $300 from a dentist for providing two music sets for the dentist to play for her patients.
22-Jun Served a disc jockey for a wedding party. The father of the bride agreed to pay $1,000 in July.
25-Jun Received $500 for serving as the disc jockey for a cancer charity ball hosted by the local hospital.
29-Jun Paid $240 (music expense) to Galaxy Music for the use of its Library of music demos.
30-Jun Received $900 for serving as PS disc jockey for a local club's monthly dance.
30-Jun Paid Pinnacle Realty $400 for PS Music's share of the receptionist's wages for June.
30-Jun Paid Pinnacle Realty $300 for PS Music's share of the utilities for June.
30-Jun Determined that the cost of supplies on hand is $170. Therefor, the cost of supplies used during the month was $180.
30-Jun Paid for miscellaneous expenses, $415.
30-Jun Paid $1,000 royalties (music expense) to National Music Clearing for use of various artists' music during the month.
30-Jun Paid dividends, $500.
Instructions: 1 Indicate the effect of each transactions and the balances after each transactions, using the following worksheeet below.
2 Prepare an income statement for PS Music for the month ended June 30, 20Y5.
3 Prepare a statement of stockholders' equity for PS Music for the month ended June 30, 20Y5.
4 Prepare a balance sheet for PS Music as of June 30, 20Y5.
Assets = Liabilities + Stockholders' Equity
= Equipment
Accounts Accounts Common Fees Music Office Rent Rent Advertising Wages Utilities Supplies Misc
Cash + Receivable + Supplies = Payable + Stock − Dividends + Earned − Expense − Expense − Expense − Expense − Expense − Expense − Expense − Expense
June 1 + - 0 - 0 - 0 - 0 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
June 2 + - 0 - 0 - 0 - 0 - 0 - 0 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
June 2 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0
June 4 - 0 - 0 + - 0 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0
June 6 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - - 0 - 0 - 0 - 0 - 0
June 8 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 12 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 13 - - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 16 + - 0 - 0 - 0 - 0 - 0 - 0 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 22 - 0 + - 0 - 0 - 0 - 0 - 0 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 25 + - 0 - 0 - 0 - 0 - 0 - 0 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 29 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 30 + - 0 - 0 - 0 - 0 - 0 - 0 + - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0 - 0
June 30 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0 - 0
June 30 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - 0 - 0
June 30 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - 0
June 30 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0
June 30 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - 0 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0
June 30 - - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0
Balance - 0 - 0 - 0 - 0 - 0 - - 0 - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0
2. PS Music
Income Statement
For the Month Ended June 30, 20Y5
Fees earned: $ - 0
Expenses:
Music expense - 0
Office rent expense - 0
Equipment rent expense - 0
Advertising expense - 0
Wages expense - 0
Utilities expense - 0
Supplies expense - 0
Miscellaneous expenses - 0
Total Expenses - 0
Net income $ - 0
3. PS Music
Statement of Stockholders' Equity
For the Month Ended June 30, 20Y5
Common Retained
Stock Earnings Total
Balances, June 1 20Y5 $ - 0 $ - 0 $ - 0
Issued common stock 4,000 - 0 $ 4,000
Net income - 0 1,340 $ 1,340
Dividends - 0 (500) $ (500)
Balances, June 30, 20Y5 $ 4,000 $ 840 $ 4,840
4. PS Music
Balance Sheet
June 30, 20Y5
Assets
Cash $ - 0
Accounts receivable - 0
Supplies - 0
Total assets $ - 0
Liabilities
Accounts payable $ - 0
Stockholders'
Common stock $ - 0
Retained earnings - 0
Total stockholders' equity - 0
Total liabilities and stockholders' equity $ - 0