Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: Cash $ 7,000 Accounts Payable $ 9,550 Accounts Receivable 38,250 Deferred Revenue (deposits) 3,400 Supplies 1,600 Notes Payable (long-term) 64,000 Equipment 15,800 Common Stock 14,500 Land 9,250 Retained Earnings 8,150 Buildings 27,700 Following are the January transactions: Received a $670 deposit from a customer who wanted her piano rebuilt in February. Rented a part of the building to a bicycle repair shop; $740 rent received for January. Delivered five rebuilt pianos to customers who paid $21,575 in cash. Delivered two rebuilt pianos to customers for $10,000 charged on account. Received $7,600 from customers as payment on their accounts. Received an electric and gas utility bill for $380 for January services to be paid in February. Ordered $980 in supplies. Paid $2,800 on account in January. Paid $18,400 in wages to employees in January for work done this month. Received and paid cash for the supplies in (g). E3-13 (Algo) Part 5 5-a. Prepare an income statement for the month ended and at January 31. 5-b. Prepare a statement of retained earnings for the month ended and at January 31. If there are no dividends, include a line that reports Dividends of zero. 5-c. Prepare a classified balance sheet at January 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows:

Cash	$ 7,000	Accounts Payable	$ 9,550
Accounts Receivable	38,250	Deferred Revenue (deposits)	3,400
Supplies	1,600	Notes Payable (long-term)	64,000
Equipment	15,800	Common Stock	14,500
Land	9,250	Retained Earnings	8,150
Buildings	27,700

Following are the January transactions:

Received a $670 deposit from a customer who wanted her piano rebuilt in February.
Rented a part of the building to a bicycle repair shop; $740 rent received for January.
Delivered five rebuilt pianos to customers who paid $21,575 in cash.
Delivered two rebuilt pianos to customers for $10,000 charged on account.
Received $7,600 from customers as payment on their accounts.
Received an electric and gas utility bill for $380 for January services to be paid in February.
Ordered $980 in supplies.
Paid $2,800 on account in January.
Paid $18,400 in wages to employees in January for work done this month.
Received and paid cash for the supplies in (g).

E3-13 (Algo) Part 5

5-a. Prepare an income statement for the month ended and at January 31.

5-b. Prepare a statement of retained earnings for the month ended and at January 31. If there are no dividends, include a line that reports Dividends of zero.

5-c. Prepare a classified balance sheet at January 31.

Expert Solution

Step 1 Introduction

Income Statement :— It is one of the financial statement that shows profitability, total revenue and total expenses of company.

Balance Sheet :— It is one of the financial statement that shows list of final balances of assets, liabilities and owner's equity.

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