Question

#8

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	$	6,300		Accounts Payable	$	8,850
Accounts Receivable		31,000		Deferred Revenue (deposits)		4,450
Supplies		2,550		Notes Payable (long-term)		49,000
Equipment		12,300		Common Stock		12,500
Land		9,150		Retained Earnings		12,500
Building		26,000

Following are the January transactions:

1. Received a $760 deposit from a customer who wanted her piano rebuilt in February.
2. Rented a part of the building to a bicycle repair shop; $785 rent received for January.
3. Delivered five rebuilt pianos to customers who paid $21,475 in cash.
4. Delivered two rebuilt pianos to customers for $10,500 charged on account.
5. Received $8,100 from customers as payment on their accounts.
6. Received an electric and gas utility bill for $600 for January services to be paid in February.
7. Ordered $1,120 in supplies.
8. Paid $2,250 on account in January.
9. Paid $15,900 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

Answers

• All working forms part of the answer
• Unadjusted Trial balance at Jan 31, as asked

Accounts title	Debit	Credit
Cash	$18,150
Accounts Receivable	$33,400
Supplies	$3,670
Equipment	$12,300
Land	$9,150
Building	$26,000
Accounts Payable		$7,200
Deferred Revenue (deposits)		$5,210
Notes Payable (long-term)		$49,000
Common Stock		$12,500
Retained Earnings		$12,500
Service Revenue		$31,975
Rent Revenue		$785
Utilities expenses	$600
Wages expenses	$15,900
TOTAL	$119,170	$119,170

• Working for above balances

	Cash	Accounts Receivable	Supplies	Equipment	Land	Building	Accounts Payable	Deferred Revenue (deposits)	Notes Payable (long-term)	Common Stock	Retained Earnings
Beginning balance	$6,300	$31,000	$2,550	$12,300	$9,150	$26,000	$8,850	$4,450	$49,000	$12,500	$12,500
Transactions #
a	$760							$760
b	$785										$785
c	$21,475										$21,475
d		$10,500									$10,500
e	$8,100	($8,100)
f							$600				($600)
g
h	($2,250)						($2,250)
i	($15,900)										($15,900)
j	($1,120)		$1,120
Ending balance	$18,150	$33,400	$3,670	$12,300	$9,150	$26,000	$7,200	$5,210	$49,000	$12,500	$28,760