Transaction Analysis On June 1, a group of bush pilots inBritish Columbia, Canada, formed the BC Back-Country Airlines,Inc., by selling $51,000 of common stock for cash. The group thenleased sev-eral aircraft and docking facilities, equipping them totransport campers and hunters to outpost camps owned by variousresorts. The following transactions occurred during June:
June
1. Sold common stock for cash, $51,000.
2. Paid June rent for aircraft, dockage, and dockside office,$5,500.
3. Received invoice for the cost of a reception the firm gave toentertain resort owners,
$3,100.
4. Paid for June advertising in various sports magazines,$1,900.
5. Paid insurance premium for June, $3,500.
6. Rendered services for various groups for cash, $25,000.
7. Billed the Canadian Ministry of Natural Resources fortransporting mapping personnel,
$4,900, and billed various firms for services, $15,000.
8. Paid $1,500 on accounts payable.
9. Received $14,200 on account from clients.
10. Paid June wages, $16,000.
11. Received an invoice for the cost of fuel used during June,$3,500.
12. Paid a cash dividend, $6,000.
Required
a. Set up an accounting equation in columnar form with thefollowing column headings: Cash, Ac-
counts Receivable, Accounts Payable, Common Stock, and RetainedEarnings.
b. Show how the June transactions affect the items in theaccounting equation, and total all columns
to show that assets equal liabilities plus stockholders’ equityas of June 30.
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