Question

5.

Required information

[The following information applies to the questions displayed below.]

Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows:

Cash	$	7,250		Accounts Payable	$	12,350
Accounts Receivable		33,000		Deferred Revenue (deposits)		4,200
Supplies		1,750		Notes Payable (long-term)		40,750
Equipment		10,500		Common Stock		11,000
Land		6,650		Retained Earnings		18,350
Building		27,500

Following are the January transactions:

1. Received a $900 deposit from a customer who wanted her piano rebuilt in February.
2. Rented a part of the building to a bicycle repair shop; $600 rent received for January.
3. Delivered five rebuilt pianos to customers who paid $12,300 in cash.
4. Delivered two rebuilt pianos to customers for $6,900 charged on account.
5. Received $4,900 from customers as payment on their accounts.
6. Received an electric and gas utility bill for $410 for January services to be paid in February.
7. Ordered $825 in supplies.
8. Paid $1,400 on account in January.
9. Paid $17,700 in wages to employees in January for work done this month.
10. Received and paid cash for the supplies in (g).

3. Post the journal entries to the T-accounts. Show the unadjusted beginning and ending balances in the T-accounts.

__________________________________________________________

6.

Required information

[The following information applies to the questions displayed below.]

Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows:

Cash	$	7,250		Accounts Payable	$	12,350
Accounts Receivable		33,000		Deferred Revenue (deposits)		4,200
Supplies		1,750		Notes Payable (long-term)		40,750
Equipment		10,500		Common Stock		11,000
Land		6,650		Retained Earnings		18,350
Building		27,500

Following are the January transactions:

1. Received a $900 deposit from a customer who wanted her piano rebuilt in February.
2. Rented a part of the building to a bicycle repair shop; $600 rent received for January.
3. Delivered five rebuilt pianos to customers who paid $12,300 in cash.
4. Delivered two rebuilt pianos to customers for $6,900 charged on account.
5. Received $4,900 from customers as payment on their accounts.
6. Received an electric and gas utility bill for $410 for January services to be paid in February.
7. Ordered $825 in supplies.
8. Paid $1,400 on account in January.
9. Paid $17,700 in wages to employees in January for work done this month.
10. Received and paid cash for the supplies in (g).

4. Prepare an unadjusted trial balance at January 31.

Answer 1

Answer to Q.5

1. Journal Entries for the given transactions:

Sl.No.	Name of the account	Debit	Credit
a.	Cash A/c Dr	$900
	To Deferred Revenue Account		$900
	(For deposit received from a customer)
b.	Cash A/c Dr	$600
	To rental Income		$600
	(For rental income received)
c.	Cash A/c Dr	$12,300
	To Sales A/c		$12,300
	(For pianos delivered to customers for cash)
d.	Accounts receivable A/c Dr	$6,900
	To Sales A/c		$6,900
	(For pianos delivered to customers on credit basis)
e.	Cash A/c Dr	$4,900
	To Accounts Receivable A/c		$4,900
	(For Cash received from customers)
f.	Misc.Expenses A/c Dr	$410
	To Liability for Expenses A/c		$410
	(For Misc.Exp payable)
g.	No entry Required
h.	Accounts Payable A/c Dr	$1,400
	To Cash A/c		$1,400
	(For Cash paid )
i.	Supplies A/c Dr	$825
	To Cash A/c		$825
	(For supplies ordered received and cash paid)
j.	Wages A/c Dr	$17,700
	To Cash A/c		$17,700

2. Posting journal entries to the respective accounts.

a. Cash Account

Debit	Amount	Credit	Amount
To Balance b/d	$7,250	By Supplies A/c	$825
To Deferred Revenue A/c	$900	By Accounts Payable A/c	$1400
To Rental Income A/c	$600	By Wages A/c	$17,700
To Cash Sales	$12,300
To Accounts Receivable	$4,900
		By balance c/d	$6,025
Total	$25,950	Total	$25,950

b. Accounts Receivable Account

Debit	Amount	Credit	Amount
To Balance b/d	$33,000	By Cash A/c	$4,900
To Sales A/c	$6,900
		By balance c/d	$35,000
Total	$39,900	Total	$39,900

c. Supplies Account

Debit	Amount	Credit	Amount
To Balance b/d	$1,750
To Cash A/c	$825
		By balance c/d	$2,568
Total	$2,568	Total	$2,568

d. Equipment Account

Debit	Amount	Credit	Amount
To Balance b/d	$10,500
		By balance c/d	$10,500
Total	$10,500	Total	$10,500

e. Land Account

Debit	Amount	Credit	Amount
To Balance b/d	$6,650
		By balance c/d	$6,650
Total	$6,650	Total	$6,650

e. Building Account

Debit	Amount	Credit	Amount
To balance b/d	$27,500
		By balance c/d	$27,500
Total	$27,500	Total	$27,500

f. Accounts Payable Account

Debit	Amount	Credit	Amount
To Cash A/c	$1,400	By Balance b/d	$12,350
To Balance c/d	$10,950
Total	$12,350	Total	$12,350

g.Deferred revenue Account

Debit	Amount	Credit	Amount
		By Balance b/d	$4,200
		By Cash A/c	$900
To Balance c/d	$5,100
Total	$5,100	Total	$5,100

h. Notes Payable Account

Debit	Amount	Credit	Amount
		By Balance c/d	$40,750
To Balance c/d	$40,750
Total	$40,750	Total	$40,750

i. Liability for Expenses Account

Debit	Amount	Credit	Amount
		By Misc.Expenses A/c	$410
To Balance c/d	$410
Total	$410	Total	$410

j. Income Statement

Expenditure	Amount	Income	Amount
Misc.Expenses	$410	Cash Sales	$12,300
Wages	$17,700	Credit Sales	$6,900
		Rental Income	$600
Addition to retained earnings	$1,690
Total	$19,800	Total	$19,800

Answer to Q.6

Unadjusted Trail balance

Sl.No.	Name of the account	Debit	Credit
	Cash A/c	$6,025
	Accounts receivable	$35,000
	Supplies	$2,575
	Equipment	$10,500
	Land	$6,650
	Building	$27,500
	Accounts Payable		$10,950
	Deferred Revenue		$5,100
	Notes PAyable		$40,750
	Common Stock		$11,000
	Retained earnings		$18,350
	Liability for expenses		$410
	Cash Sales		$12,300
	Credit sales		$6,900
	Rental Income		$600
	Misc.Expenses	$410
	Wages	$17,700
	Total	$106,360	$106,360