Question

Spicewood Stables, Inc., was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review.

1. Received contributions from investors and issued $240,000 of common stock on April 1.
2. Acquired a barn for $149,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance.
3. Provided $20,100 in animal care services for customers on April 3, all on credit.
4. Rented stables to customers who cared for their own animals; received cash of $16,000 on April 4 for rent earned this month.
5. On April 5, received $3,050 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue).
6. Purchased and received hay and feed supplies on account on April 6 for $5,200.
7. Paid $2,580 on accounts payable on April 7 for previous purchases.
8. Received $2,140 from customers on April 8 on accounts receivable.
9. On April 9, prepaid a two-year insurance policy for $6,300 for coverage starting in May.
10. On April 28, paid $820 in cash for water and utilities used this month.
11. Paid $14,900 in wages on April 29 for work done this month.
12. Received an electric utility bill on April 30 for $1,340 for usage in April; the bill will be paid next month.

Required:

1. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations.

Accounts Receivable Beg Bal Beg. Bal End. Bal End. Bal Supplies Prepaid Insurance Beg. Bal Beg. Bal End. Bal End. Bal Buildings Accounts Payable Beg. Bal Beg. Bal End. Bal End. Bal Deferred Revenue Notes Payable (long-term) Beg. Bal Beg. Bal End. Bal End. Bal Common Stock Service Revenue Beg. Bal Beg. Bal End. Bal End. Bal Rent Revenue Utilities Expense Beg. Bal Beg. Bal End. Bal End. Ba Salaries and Wages Expense Beg. Bal End. Bal ( Req1 Req 3 >

Answer 1

Cash					Accounts Receivable
Beg.Bal	-				Beg.Bal
Common Stock	240,000	Buildings	74,500		Service Revenue	20,100	Cash	2,140
Rent Revenue	16,000	Accounts Payable	2,580
Deferred Revenue	3,050	Prepaid Insurance	6,300
Accounts Receivable	2,140	Utilities Expense	820
		Salaries and Wages	14,900
End Bal			162,090		End Bal			17,960
	261,190		261,190			20,100		20,100
Supplies					Prepaid Insurance
Beg.Bal					Beg.Bal
Accounts Payable	5,200				Cash	6,300
End Bal			5,200		End Bal			6,300
	5,200		5,200			6,300		6,300
Buildings					Accounts Payable
Beg.Bal					Beg.Bal
							Supplies	5,200
Cash	74,500				Cash	2,580	Utilities Expense	1,340
Notes Payable	74,500
End Bal			149,000		End Bal	3,960
	149,000		149,000			6,540		6,540
Deferred Revenue					Notes Payable (Long-term)
Beg.Bal					Beg.Bal
		Cash	3,050				Buildings	74,500
End Bal	3,050				End Bal	74,500
	3,050		3,050			74,500		74,500
Common Stock					Service Revenue
Beg.Bal					Beg.Bal
		Cash	240,000				Accounts Receivable	20,100
End Bal	240,000				End Bal	20,100
	240,000		240,000			20,100		20,100
Rent Revenue					Utilities Expense
Beg.Bal					Beg.Bal
		Accounts Receivable	16,000
					Cash	820
					Accounts Payable	1,340
End Bal	16,000				End Bal			2,160
	16,000		16,000			2,160		2,160
Salaries and Wages Expense
Beg.Bal
Cash	14,900
End. Bal			14,900
	14,900		14,900