Question

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Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: $ $ Cash Accounts receivable Supplies Equipment Land Building 6,800 30,300 1,480 9,900 7,300 26,200 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings 8,800 3,740 47,200 182 728 21,330 a. Rebuilt and delivered five pianos in January to customers who paid $19,200 in cash. b. Received a $570 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop, received $900 for rent in January. d. Received $8,200 from customers as payment on their accounts. e. Received an electric and gas utility bill for $510 to be paid in February f. Ordered $920 in supplies. g. Paid $1,840 on account in January. h. Received from the home of Stacey Eddy, the major shareholder, a $910 tool (equipment) to use in the business in exchange for 120 shares of $1 par value stock. i. Paid $14,100 in wages to employees who worked in January j. Declared and paid a $1,600 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f). Required: Prepare an unadjusted classified income statement for January of the second year (ignore income taxes).

Answer 1

Stacey's Piano Rebuilding Bal Accounts Receivable 30300d. 1840 8200 Cash 6800 g. 19200 i. 570 j. 900 k. 8200 1840 14100 1600 920 Bal. 32140 23940 32140 Bal. 17210 35670 35670 Equipment 9900 Bal Supplies 1480 920 Bal. 2400 910 2400 2400 Bal. 10810 10810 10810 Bal Land 7300 Building 26200 Bal Bal. 7300 7300 7300 Bal. 26200 26200 26200 Accounts Payable Bal 8800 510 Deferred Revenue (Deposits) 3740 570 4310 4310 4310 Bal 9310 9310 9310

Note Payable Common Stock Bal Bal 47200 182 120 Bal Bal 47200 47200 302 302 47200 302 Rebuilding Fees Revenue Retained Earnings 1600 Bal 21330 19200 Bal Bal 19730 21330 19200 19200 21330 19200 Rent Revenue Wages Expense 14100 900 Bal 900 900 Bal 14100 14100 14100 900 Utilities Expense 510 Additional Capital Bal 1518 h. 1518 728 790 1518 Bal 510 510 510

Debit in $ Credit in $ 17210 23940 2400 7300 26200 10810 Trial Balance For the period ending ... Particulars Cash Accounts Receivable Supplies Land Building Equipment Accounts Payable Deferred Revenue (Deposits) Note Payable Common Stock Additional Capital Retained Earnings Rebuilding Fees Revenue Rent Revenue Wages Expense Utilities Expense Totals 9310 4310 47200 302 1518 19730 19200 900 14100 510 102470 102470

Statement of Income For the period ending ... Rebuilding Fees Revenue Rent Revenue Total Revenues 19200 900 20100 Expenses: Wages Expense Utilities Expense Net Income 14100 510 14610 5490 Statement of Retained Earnings For the period ending ... Beginning Balance Net Income 21330 5490 26820 -1600 25220 Dividends

Amounts Amounts Balance Sheet As at ... Assets Current Assets Cash Accounts Receivable Supplies Amounts Amounts Liabilities Current Liabilities 17210 Accounts Payable 23940 Deferred Revenue (Deposits) 2400 43550 Note Payable 9310 4310 47200 60820 Non Current Assets Land Building Equipment Total Assets 7300 26200 10810 Shareholders Equity Contributed Capital Additional Capital 44310 Retained Earnings 87860 Total Liabilities & Equity 302 1518 25220 27040 87860