Question

a. Received contributions from five investors of $60,000 in cash ($12,000 each), a barn valued at $100,000, land valued at $90,000, and supplies valued at $12,000. Each investor received 3,000 shares of stock with a par value of $0.01 per share. b. Built a small barn for $62,000. The company paid half the amount in cash on April 1, 2017, and signed a three-year note payable for the balance. C. Provided $35,260 in animal care services for customers, all on credit. d. Rented stables to customers who cared for their own animals, received cash of $13,200. e. Received from a customer $2,400 to board her horse in May, June, and July (record as unearned revenue). f. Purchased hay and feed supplies on account for $3,810 to be used in the summer. g. Paid $1,240 in cash for water utilities 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. At the end of the month, purchased a two-year insurance policy for $3,600. 1. Received an electric utility bill for $1,800 for usage in April, the bill will be paid next month. m. Paid $100 cash dividend to each of the five investors at the end of the month. In the above list of transactions which occur w/in one month, which transactions are: 1. Revenue to be recognized/recorded for that month. Identify by transaction letter. (2 pts) 2. Expenses to be recorded for that month. Identify by transaction letter. (2 pts) 3. List the revenues and calculate total $ revenue. (3 pts) 4. List the expenses and calculate total $ expenses (3 pts)

Answer 1

1. Revenue to be recognized for the month are -

Revenue Item	Total
Animal Care Services	$35,260
Stable Rent	$13,200

2. Expenses to be recorded for the month are -

Expense Item	Total
Water Utilities	$1,240
Wages	$6,000
Electric Utility Bill	$1,800

3. Calculation of Total revenue -

Stable Rent	$13,200
Boarding Fee of Horses	$2,400
Animal Care Services	$35,260
Total	$50,860

4. Calculation of Total expenses -

Water Utilities	$1,240
Wages	$6,000
Electric Utility Bill	$1,800
Purchases	$3,810
Insurance	$3,600
Total	$16,450

Note - List of Total Revenue and Expenses include unearned revenue and prepaid expenses.