Question

Alpine Stables Inc. was established on April 1, 2020. 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 2020 are provided for your review: a Received contributions from five investors of S60,000 in cash (S12,000 each), a barn valued at $100,000, and land valued at $90,000. Each investor received 3,000 shares. b. Built a small barn for $62,000. The company paid half the amount in cash on April 1, 2020, and signed a three-year note payable for the balance. c. Provided animal care services to customers, all on credit, for $35,260. d. Rented stables to customers who cared for their own animals, and received cash payment of $13,200. e. Received from a customer $2,400 to board her horse in April, May, and June (record as deferred revenue). f. Purchased hay and feed supplies on account for $3,180 to be used in the summer. g. Paid S1,240 in cash for water utilities expense incurred in the month. h. Paid $2,700 on accounts payable for previous purchases. i. Received $10,000 from customers on accounts receivable. j. Paid $6,000 in wages to employees who worked during the month. k Purchased a one-year insurance policy for $3,600 at the end of the month. Received an electric utility bill for $1,800 for usage in April; the bill will be paid in May. m. Paid S500 cash dividend to each of the investors at the end of the month. Required: Prepare journal entries for transaction a-m

Answer 1

Journal Entries Date Account Title and Explaination Post. Ref. Debit $ Credit $ a $ $ $ 60,000.00 100,000.00 90,000.00 Cash Warehouse Land Common Stock (To record cash, barn and Land Invested into Business in exchange of Common Stock) $ 250,000.00 b $ 62,000.00 Warehouse Cash Notes Payable (To record barn buid for cash and Note Payable) 31,000.00 31,000.00 $ с $ 35,260.00 Accounts Receivable Service Revenue (To record Service provided on account) $ 35,260.00

d $ 13,200.00 $ 13,200.00 e Cash Rent Revenue (To record stables rented for cash) Cash Deferred Revenue (To record cash received for services to be performed in future) $ 2,400.00 2,400.00 f $ 3,180.00 Supplies Accounts Payable (To record Supplies purchased on account) $ 3,180.00 $ 1,240.00 Utilities Expense Cash (To record Utilities expense paid) $ 1,240.00

h $ 2,700.00 Accounts Payable Cash (To record payment of payables) $ 2,700.00 i $ 10,000.00 Cash Accounts Receivable (To record collection of receivables) $ 10,000.00 $ 6,000.00 Wages Expenses Cash (To record payment of Wages Expenses) $ 6,000.00 k $ 3,600.00 $ 3,600.00 Prepaid Insurance Cash (To record payment for one year insurance policy premium) 1 $ 1,800.00 Electricity Expenses Electricity Expenses Payable (To record Electricity expenses) $ 1,800.00 m $ 500.00 Dividends Cash (To record cash dividends paid) S 500.00