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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 Accounts payable 50,000 2,400 Note payable (due in three years) 16,000 Contributed capital Deferred revenue (deposits) 12,000 Retained earnings 64,000 Show Transcribed Text 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. Required: 1&2. Enter the following January 2020 transactions in the T-accounts, using the letter of each transaction as the reference: 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). 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. $ 16,000 6,400 2 4. Calculate the company's net earnings for January by using the cash basis of accounting. Answer is complete but not entirely correct. Net earnings $ 25,540 80,000 16,000 36,000

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 Accounts payable 50,000 2,400 Note payable (due in three years) 16,000 Contributed capital Deferred revenue (deposits) 12,000 Retained earnings 64,000 Show Transcribed Text 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. Required: 1&2. Enter the following January 2020 transactions in the T-accounts, using the letter of each transaction as the reference: 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). 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. $ 16,000 6,400 2 4. Calculate the company's net earnings for January by using the cash basis of accounting. Answer is complete but not entirely correct. Net earnings $ 25,540 80,000 16,000 36,000

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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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. Show Transcribed Text 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). $ 16,000 6,400 80,000 16,000 36,000 4. Calculate the company's net earnings for January by using the cash basis of accounting. Answer is complete but not entirely correct. Net earnings $ 25,540 x
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. Show Transcribed Text 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). $ 16,000 6,400 80,000 16,000 36,000 4. Calculate the company's net earnings for January by using the cash basis of accounting. Answer is complete but not entirely correct. Net earnings $ 25,540 x
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