a. Received contributions from five investors of $60,000 in cash ($12,000 each), a barn valued at $100,000, and land valued at $90,000. Each investor received 3,000 shares.
a. Received contributions from five investors of $60,000 in cash ($12,000 each), a barn valued at $100,000, and land valued at $90,000. Each investor received 3,000 shares.
a. Received contributions from five investors of $60,000 in cash ($12,000 each), a barn valued at $100,000, and land valued at $90,000. Each investor received 3,000 shares.
You must complete the following tasks below for the month of April in the Excel workbook provided.
Required:
Part 1. Prepare a journal entry to record each transaction. You must provide a short explanation for each transaction.
Part 2. Setup appropriate T-accounts. All accounts begin with 0 balances.
Part 3. Record in the T-accounts the effects of each transaction for Sydney Stables in April, referencing each transaction in the accounts with the transaction letter. Show the ending balances in the T-accounts.
Part 4. Prepare a trial balance.
Part 5. Prepare a statement of earnings, a statement of shareholders’ equity and a statement of financial position for the month ended April 30, 2020.
Transcribed Image Text:a. Received contributions from five investors of $60,000 in cash ($12,000 each), a barn valued at $100,000, and land valued at $90,000.
Each investor received 3,000 shares.
b. Built a small barn for $62,000. The company paid half the amount in cash on April 1, 2020, and signed a three-year note payable for
the balance.
c. Provided animal care services to customers, all on credit, for $35,260.
d. Rented stables to customers who cared for their own animals, and received cash payment of $13,200.
e. Received from a customer $2,400 to board her horse in April, May, and June (record as deferred revenue).
f. Purchased hay and feed supplies on account for $3,180 to be used in the summer.
g. Paid $1,240 in cash for water utilities expense incurred in the month.
h. Paid $2,700 on accounts payable for previous purchases.
✓ Received $10,000 from customers on accounts receivable.
j. Paid $6,000 in wages to employees who worked during the month.
k. Purchased a one-year insurance policy for $3,600 at the end of the month.
1. Received an electric utility bill for $1,800 for usage in April; the bill will be paid in May.
m. Paid $500 cash dividend to each of the investors at the end of the month.
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Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
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