Stacey's Piano Rebuilding Company has been operating for one year (2019). At the start of 2020, its statement of earnings accounts had zero balances and the account balances on its statement of financial position were as follows: Cash Accounts receivable Supplies Equipment Land Building $ 10,000 50,000 2,400 Accounts payable Deferred revenue (deposits) Note payable (due in three years) 16,000 Contributed capital 12,000 Retained earnings 64,000 Required: 1&2. Enter the following January 2020 transactions in the T-accounts, using the letter of each transaction as the reference: a. Received a $600 deposit from a customer who wanted her piano rebuilt. b. Rented a part of the building to a bicycle repair shop; received $820 for rent in January. c. Rebuilt and delivered five pianos to customers who paid $18,400 in cash. d. Received $7,200 from customers as payment on their accounts. $ 16,000 6,400 80,000 16,000 36,000 e. Received an electric and gas utility bill for $520 to be paid in February. f. Ordered $960 in supplies. g. Paid $2,140 on account to suppliers. h. Received from Sam Mensa, the major shareholder, a $920 tool (equipment) to use in the business in exchange for the company's shares. i. Paid $15,000 in wages to employees for work in January. j. Declared and paid a cash dividend of $2,600. k. Received and paid for the supplies ordered in (f).

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...
icon
Related questions
Question

2

Stacey's Piano Rebuilding Company has been operating for one year (2019). At the start of 2020, its statement of earnings accounts
had zero balances and the account balances on its statement of financial position were as follows:
Cash
Accounts receivable
Supplies
Equipment
Land
Building
$ 10,000
50,000
2,400
16,000
12,000
64,000
Accounts payable
Deferred revenue (deposits)
Note payable (due in three years)
Contributed capital
Retained earnings
Required:
1&2. Enter the following January 2020 transactions in the T-accounts, using the letter of each transaction as the reference:
a. Received a $600 deposit from a customer who wanted her piano rebuilt.
b. Rented a part of the building to a bicycle repair shop; received $820 for rent in January.
c. Rebuilt and delivered five pianos to customers who paid $18,400 in cash.
d. Received $7,200 from customers as payment on their accounts.
e. Received an electric and gas utility bill for $520 to be paid in February.
f. Ordered $960 in supplies.
$ 16,000
6,400
80,000
16,000
36,000
g. Paid $2,140 on account to suppliers.
h. Received from Sam Mensa, the major shareholder, a $920 tool (equipment) to use in the business in exchange for the company's
shares.
i. Paid $15,000 in wages to employees for work in January.
j. Declared and paid a cash dividend of $2,600.
k. Received and paid for the supplies ordered in (f).
Transcribed Image Text:Stacey's Piano Rebuilding Company has been operating for one year (2019). At the start of 2020, its statement of earnings accounts had zero balances and the account balances on its statement of financial position were as follows: Cash Accounts receivable Supplies Equipment Land Building $ 10,000 50,000 2,400 16,000 12,000 64,000 Accounts payable Deferred revenue (deposits) Note payable (due in three years) Contributed capital Retained earnings Required: 1&2. Enter the following January 2020 transactions in the T-accounts, using the letter of each transaction as the reference: a. Received a $600 deposit from a customer who wanted her piano rebuilt. b. Rented a part of the building to a bicycle repair shop; received $820 for rent in January. c. Rebuilt and delivered five pianos to customers who paid $18,400 in cash. d. Received $7,200 from customers as payment on their accounts. e. Received an electric and gas utility bill for $520 to be paid in February. f. Ordered $960 in supplies. $ 16,000 6,400 80,000 16,000 36,000 g. Paid $2,140 on account to suppliers. h. Received from Sam Mensa, the major shareholder, a $920 tool (equipment) to use in the business in exchange for the company's shares. i. Paid $15,000 in wages to employees for work in January. j. Declared and paid a cash dividend of $2,600. k. Received and paid for the supplies ordered in (f).
4. Calculate the company's net earnings for January by using the cash basis of accounting.
X Answer is complete but not entirely correct.
Net earnings
$ 5,320
Transcribed Image Text:4. Calculate the company's net earnings for January by using the cash basis of accounting. X Answer is complete but not entirely correct. Net earnings $ 5,320
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Forecasting Financial Statement
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College