Question

Required information (The following information applies to the questions displayed below.) 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 6,700 30,100 1,540 9,600 8,100 26,600 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings 9,100 3,240 47, 300 1,560 6,240 15,200 a. Rebuilt and delivered five pianos in January to customers who paid $19,000 in cash. b. Received a $560 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop; received $820 for rent in January. d. Received $7,700 from customers as payment on their accounts. e. Received an electric and gas utility bill for $490 to be paid in February. f. Ordered $910 in supplies. g. Paid $2,040 on account in January h. Received from the home of Stacey Eddy, the major shareholder, a $980 tool (equipment) to use in the business in exchange for 150 shares of $1 par value stock. i. Paid $14,700 in wages to employees who worked in January. j. Declared and paid a $2,200 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f). 3. Using the data from the T-accounts, amounts for the following at the end of January of the second year, were:

Answer 1

Revenues = 19,000 + 820 = 19,820

Expenses = 490 + 14,700 = 15,190

Net income = 19,820 - 15,190

=4,630

2.Assets= 6,700 + 30,100 + 1,540 + 9,600 + 8,100 + 26,600 + 19,000 + 560 +820 - 490 -2,040 + 980 - 14,700 - 2,200

=84,570

Liabilities = 9,100 + 3,240 + 47,300 + 560 - 2,040

=58,160

Stockholders Equity = 1,560 + 6,240 + 15,200 + 4,630 + 980 - 2,200

=26,410