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Spicewood Stables, Incorporated, was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review. a. Received contributions from investors and issued $150,000 of common stock on April 1. b. Acquired a barn for $205,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance. c. Provided $23,500 in animal care services for customers on April 3, all on credit. d. Rented stables to customers who cared for their own animals; received cash of $22,000 on April 4 for rent earned this month. e. On April 5, received $1,550 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue). f. Purchased and received hay and feed supplies on account on April 6 for $3,200. g. Paid $1,720 on accounts payable on April 7 for previous purchases. h. Received $1,820 from customers on April 8 on accounts receivable. i. On April 9, prepaid a two-year insurance policy for $4,600 for coverage starting in May. j. On April 28, paid $1,100 in cash for water and utilities used this month. k. Paid $6,500 in wages on April 29 for work done this month. I. Received an electric utility bill on April 30 for $2,260 for usage in April; the bill will be paid next month.

Spicewood Stables, Incorporated, was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review. a. Received contributions from investors and issued $150,000 of common stock on April 1. b. Acquired a barn for $205,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance. c. Provided $23,500 in animal care services for customers on April 3, all on credit. d. Rented stables to customers who cared for their own animals; received cash of $22,000 on April 4 for rent earned this month. e. On April 5, received $1,550 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue). f. Purchased and received hay and feed supplies on account on April 6 for $3,200. g. Paid $1,720 on accounts payable on April 7 for previous purchases. h. Received $1,820 from customers on April 8 on accounts receivable. i. On April 9, prepaid a two-year insurance policy for $4,600 for coverage starting in May. j. On April 28, paid $1,100 in cash for water and utilities used this month. k. Paid $6,500 in wages on April 29 for work done this month. I. Received an electric utility bill on April 30 for $2,260 for usage in April; the bill will be paid next month.

FINANCIAL ACCOUNTING
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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Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations.

 

 

Spicewood Stables, Incorporated, was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review. a. Received contributions from investors and issued $150,000 of common stock on April 1. b. Acquired a barn for $205,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance. c. Provided $23,500 in animal care services for customers on April 3, all on credit. d. Rented stables to customers who cared for their own animals; received cash of $22,000 on April 4 for rent earned this month. e. On April 5, received $1,550 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue). f. Purchased and received hay and feed supplies on account on April 6 for $3,200. g. Paid $1,720 on accounts payable on April 7 for previous purchases. h. Received $1,820 from customers on April 8 on accounts receivable. i. On April 9, prepaid a two-year insurance policy for $4,600 for coverage starting in May. j. On April 28, paid $1,100 in cash for water and utilities used this month. k. Paid $6,500 in wages on April 29 for work done this month. I. Received an electric utility bill on April 30 for $2,260 for usage in April; the bill will be paid next month. Required: 1. Prepare the journal entry for each of the above transactions. 2. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations. 3. Prepare an unadjusted trial balance as of April 30. 4-a. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and net profit margin. 4-b. Determine whether the net profit margin is better or worse than the 30.0 percent earned by a close competitor. Complete this question by entering your answers in the tabs below.
Transcribed Image Text:Spicewood Stables, Incorporated, was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review. a. Received contributions from investors and issued $150,000 of common stock on April 1. b. Acquired a barn for $205,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance. c. Provided $23,500 in animal care services for customers on April 3, all on credit. d. Rented stables to customers who cared for their own animals; received cash of $22,000 on April 4 for rent earned this month. e. On April 5, received $1,550 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue). f. Purchased and received hay and feed supplies on account on April 6 for $3,200. g. Paid $1,720 on accounts payable on April 7 for previous purchases. h. Received $1,820 from customers on April 8 on accounts receivable. i. On April 9, prepaid a two-year insurance policy for $4,600 for coverage starting in May. j. On April 28, paid $1,100 in cash for water and utilities used this month. k. Paid $6,500 in wages on April 29 for work done this month. I. Received an electric utility bill on April 30 for $2,260 for usage in April; the bill will be paid next month. Required: 1. Prepare the journal entry for each of the above transactions. 2. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations. 3. Prepare an unadjusted trial balance as of April 30. 4-a. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and net profit margin. 4-b. Determine whether the net profit margin is better or worse than the 30.0 percent earned by a close competitor. Complete this question by entering your answers in the tabs below.
Cash Accounts Receivable Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Supplies Prepaid Insurance Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Buildings Accounts Payable Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Deferred Revenue Notes Payable (long-term) Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Common Stock Service Revenue Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Rent Revenue Utilities Expense Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Salaries and Wages Expense Debit Credit Beginning Balance Ending Balance
Transcribed Image Text:Cash Accounts Receivable Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Supplies Prepaid Insurance Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Buildings Accounts Payable Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Deferred Revenue Notes Payable (long-term) Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Common Stock Service Revenue Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Rent Revenue Utilities Expense Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Salaries and Wages Expense Debit Credit Beginning Balance Ending Balance
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