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. a. Received contributions from investors and issued $290,000 of common stock on April 1. b. Acquired a barn for $182,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance. c Provided $19.800 in animal care services for customers on April 3, all on credit. d. Rented stables to customers who cared for their own animals, received cash of $18.800 on April 4 for rent earned this month e. On April 5, received $2,600 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue). f Purchased and received hay and feed supplies on account on April 6 for $4,800. g. Paid $3,540 on accounts payable on April 7 for previous purchases h. Received $2,520 from customers on April 8 on accounts receivable 1. On April 9, prepaid a two-year insurance policy for $4,000 for coverage starting in May. J. On April 28. paid $1,250 in cash for water and utilities used this month. k. Paid $15.400 in wages on April 29 for work done this month. Received an electric utility bill on April 30 for $3,140 for usage in April; the bill will be paid next month. Required: 1. Prepare the journal entry for each of the above transactions 2. Post the transaction activity from requirement to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations 3. Prepare an unadjusted trial balance as of April 30. 4. Refer to the revenues and expenses shown on the unadjusted trial balance Based on this information calculate preliminary net Income and net neofit margin < Prev 19 of 23 Next >

Answer 1

Cash
Beg. bal.			0
a.	290,000
b.		91,000
d.	18,800
e.	2,600
g.		3,540
h.	2,520
i.		4,000
j.		1,250
k.		15,400
End. bal.			198,730 Dr.
Accounts Receivable
Beg. bal.			0
c.	19,800
h.		2,520
End. bal.			17,280 Dr.
Supplies
Beg. bal.			0
f.	4,800
End. bal.			4,800 Dr.
Prepaid Insurance
Beg. bal.			0
i.	4,000
End. bal.			4,000 Dr.
Buildings
Beg. bal			0
b.	182,000
End. bal.			182,000 Dr.
Accounts Payable
Beg. bal.			0
f.		4,800
g.	3,540
l.		3,140
End. bal.			4,400 Cr.
Deferred Revenue
Beg. bal.			0
e.		2,600
End. bal.			2,600 Cr.
Notes Payable ( long-term )
Beg. bal.			0
b.		91,000
End. bal.			91,000 Cr.
Common Stock
Beg. bal.			0
a.		290,000
End. bal.			290,000 Cr.
Service Revenue
Beg. bal.			0
c.		19,800
End. bal.			19,800 Cr.
Rent Revenue
Beg. bal.			0
d.		18,800
End. bal.			18,800 Cr.
Utilities Expense
Beg. bal.			0
j.	1,250
l.	3,140
End. bal.			4,390 Dr.
Salaries and Wages Expense
Beg. bal.			0
k.	15,400
End. bal.			15,400 Dr.