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 6,300 31,000 1,520 10,400 7,400 26,500 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings 8,900 2,840 47,600 1,540 6,160 16,080 a. Rebuilt and delivered five pianos in January to customers who paid $18,800 in cash. b. Received a $530 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop; received $880 for rent in January. d. Received $8,100 from customers as payment on their accounts. e. Received an electric and gas utility bill for $480 to be paid in February. f. Ordered $950 in supplies. g. Paid $1,340 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 140 shares of $1 par value stock. i. Paid $14,600 in wages to employees who worked in January. j. Declared and paid a $2,500 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f).

Answer 1

1 & 2.		Cash					Accounts receivable
	Ref.	Debit	Credit	Ref.		Ref.	Debit	Credit	Ref.
	Beg. Bal.	6300	1340	g.		Beg. Bal.	31000	8100	d.
	a.	18800	14600	i.			31000	8100
	b.	530	2500	j.		End. Bal.	22900
	c.	880	950	k.
	d.	8100
		34610	19390
	End. Bal.	15220
		Supplies					Equipment
	Ref.	Debit	Credit	Ref.		Ref.	Debit	Credit	Ref.
	Beg. Bal.	1520				Beg. Bal.	10400
	k.	950				h.	980
		2470	0				11380	0
	End. Bal.	2470				End. Bal.	11380
		Land					Building
	Ref.	Debit	Credit	Ref.		Ref.	Debit	Credit	Ref.
	Beg. Bal.	7400				Beg. Bal.	26500
		7400	0				26500	0
	End. Bal.	7400				End. Bal.	26500
		Accounts payable				Unearned revenue
	Ref.	Debit	Credit	Ref.		Ref.	Debit	Credit	Ref.
	g.	1340	8900	Beg. Bal.				2840	Beg. Bal.
			480	e.				530	b.
		1340	9380				0	3370
			8040	End. Bal.				3370	End. Bal.
		Long-term note payable			Common stock
	Ref.	Debit	Credit	Ref.		Ref.	Debit	Credit	Ref.
			47600	Beg. Bal.				1540	Beg. Bal.
		0	47600					140	h.
			47600	End. Bal.				(140*1)
							0	1680
								1680	End. Bal.
		Additional paid-in capital			Retained earnings
	Ref.	Debit	Credit	Ref.		Ref.	Debit	Credit	Ref.
			6160	Beg. Bal.		j.	2500	16080	Beg. Bal.
			840	h.			2500	16080
			(980-140)					13580	End. Bal.
		0	7000
			7000	End. Bal.

Ref. Ref. Rebuilding fees revenue Debit Credit Ref. 0 Beg. Bal. 18800 0 18800 18800 End. Bal. Rent revenue Debit Credit Ref. 0 Beg. Bal. 880C. 0 880 880 End. Bal. Ref. Ref. Ref. Beg. Bal. i. Wages expense Debit Credit 0 14600 Ref. Beg. Bal. e. Utilities expense Debit Credit 0 480 480 0 0 14600 14600 End. Bal. End. Bal. 480 3 Revenues: $ Rebuilding fees revenue Rent revenue Total 18800 880 19680 Expenses: $ Wages expense Utilities expense 14600 480

14600 Wages expense Utilities expense Total 4801 15080 Revenues - 19680 Expenses = 15080 Net income 46001 15220 Assets: $ Cash Accounts receivable Supplies Equipment Land Building Total 22900 2470 11380 7400 26500 85870 Liabilities: $ 8040 3370 Accounts payable Unearned revenue Long-term note payable Total 47600 59010

Stockholder's equity: $ 1680 7000 Common stock Additional paid-in capital Retained earnings (13580+4600) (Add net income) Total 18180 26860 Assets Liabilities + 59010[+ Stockholder's equity 26860 85870/=