Question

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	$	6,800	Accounts payable	$	8,900
Accounts receivable		30,900	Unearned revenue		3,040
Supplies		1,490	Long-term note payable		47,500
Equipment		10,600	Common stock		1,540
Land		7,600	Additional paid-in capital		6,160
Building		26,600	Retained earnings		16,850

A. Rebuilt and delivered five pianos in January to customers who paid $19,000 in cash.

b.Received a $520 deposit from a customer who wanted her piano rebuilt.

c.Rented a part of the building to a bicycle repair shop; received $830 for rent in January.

d.Received $8,000 from customers as payment on their accounts.

e.Received an electric and gas utility bill for $420 to be paid in February.

f.Ordered $900 in supplies.

g.Paid $1,640 on account in January.

h.Received from the home of Stacey Eddy, the major shareholder, a $910 tool (equipment) to use in the business in exchange for 150 shares of $1 par value stock.

i.Paid $14,900 in wages to employees who worked in January.

j.Declared and paid a $2,600 dividend (reduce Retained Earnings and Cash).

k.Received and paid cash for the supplies in (f).

1 & 2. Enter the following transactions for January of the second year into the T-accounts, using the letter of each transaction as the reference.

3. Using the data from the T-accounts, amounts for the following at the end of January of the second year, were:
revenue...... - expenses........ = net income ......

assets.....=liabilties...... +stockholder equity ......

4. What is net income if Stacey’s used the cash basis of accounting?

Answer 1

ANSWER:

Attaching images of the questions above:

5 M MAY TW T 4 FRIDAY 122.243. WK 18 6 MAY 2014 7 ANSWER 5 12 2 8 9 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 1&2 9.00 Credit 900 10.00 Cash Particulars Debit Balance 6, Boo Sales 19,000 deposit) Sales derop 520 Rent 830 Accounts Receiv. 8,000 11.00 Particulars Supplies Accounts Pay. | 1,640 Wages 14,900 Dividend dec 1, 2,600 Equipment (760. Balance (Debit) 14,350 17.00 1.00 35,150 35,150 2.00 3.00 particulars Balance Accounts Receivable Debit Pasticulass Credit 80,900 cash 8,000 Balance 102) 22,900 30.900 30900 4.00 5.00 6.00 Posticulass Balance Cash Supplies Debit 1,490 9,00 9.390 Pasticulos eredit Balance (Debit) 2,340 7.00 Particulas Balance Bapa common stock Cash Equipmeot Debit pasticulars Crelle 10,600 Balance (Debid 11,5 150 7,60

2014 JUNE SM T т w T F S 2 3 4 5 6 TO 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 03 29 30 MAY 2014 SATURDAY WK 18. 121-242 2 Land Particulass Debit particulas Credit Balance 7,600 (tilos santos Balance (Debit) 7,600 11.00 71607 7,600 12.00 Bulding Pasticulaas Balance Debit 26,600 26 Particulars credit Balance (pebit 26,600 2.00 3.00 400k Doo Accounts Payable Pasticulass o Debit padliadass Cash of 1,640 Balance ONG, Balance of Credit 7,260 18,900 olganna Coefit 8,900 18,900 6.00 7.00 Unearned Revenue Poticulars Don't Particulars Gedit T 8f Balance 3,040 Balance (Cedit) 3,040 31640 SUNI BOMO 80 hesitant long team note payable I Deiat o particuasso Credit Pasticules Balance 47,500 Balance (Credit) 47,00

3.00 4.00 5.00 common stock list Particulars Debit Particulars Celt Balance 1,840 Balance (Credit) 7,880 Equipment 150 Paid in capital 6,160 LU Solo) 7850 7,850 5.00 1 Relained Egmninge Paoticulars Debit Particular coedit oldoy 220) Balance 116,850 Cash Dividend 2,600 9000 ) Balance (Qedir 14,250 | در

JUNE S M w F S 1 22 5 B 9 10 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 06 ANSWERB: MAY 2014 TUESDAY W. 19. 126-239 10.00 Balance sheet Assets Amount liabilitice Cash Amount 14,350 Accounts pay. 7,260 Accounts Receivable 22,900 uneaaned Rev. 3,040 Supplies 2,390 Note Payable 17.500 Equipment 11,510 Common Stock 7,850 land 7,600 Retained Edoning) 14,250 Building 26,600 Net Income 3,450 185,350 85350 11 00 12.00 1.00 2.00 ANSWERU: 3.00 Revenue Expenses - Net Income Revenue 19,520 expenses = 14,070 Net Income = 19,520 - 14070 -5,450, 400 5.00 6,00 7.00

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