Question

The following information is given for Randy Equestrian Services Inc. for the year ended December 31, 2018. The account balances (all of which had their normal balance of debit or credit) at the beginning of 2018 (January 1, 2018) were as follows: Cash Accounts Payabk Accounts Receivable Income Tax Payable Prepaid Supplies Feed and Straw)S Interest Payable Land (cost) Wages Payable S 3.960 S 42,660 S 7,920 S 27,180 50.040 $ 4,860 S300,600 S 25,560 S207,000 S 108,000 Notes Payable (due in 2022) Accumuated Depreciation (BuildingsS 64,800 Common Shares Equipment Retained Eaings,12/31/2017 $270,000 S102.600 S 99,360 During the year ended December 31, 2018, the following transactions occurred: Randy earned its revenues in a variety of ways. It rented stables to customers for $36,900 paid in cash. It rented its grounds to individual riders, groups, and show organizations for $75,240 paid in cash. Randy also provided horse grooming and training services to customers, all on credit, for $540,540. Straw was purchased for $13,320 cash and debited to the prepaid supplies account. Feed in the amount of $149,220 was purchased from suppliers on credit and debited to the prepaid supplies account. There remains $28,080 of accounts receivable to be collected at December 31, 2018. a. b. c. d. e. Wages payable at the beginning of 2018 were paid early in 2018. Wages were earned by employees in the amount of $201,600, of which $16,500 remained unpaid at end of 2018. The income tax payable at the beginning of 2018 was paid early in 2018. Payments of $173,000 were made to creditors for supplies previously purchased on credit. f. g. h. i. One year's interest at 6.5% was paid on the notes payable on July 1, 2018. During 2018, Jon Hoth, a principal shareholder, purchased a diamond ring for his wife, Phoebe. The ring cost $17,000, and Jon used his personal credit to purchase it Property taxes were paid by cheque on the land and buildings in the amount of S34,000. Randy purchased a truck for S34,000, paid $15,000 in cash and paid the rest of the price in common shares. j. k. L Dividends were declared and paid by cheque in the amount of $20,200.

Answer 1

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