21. value 0.42 points PA3-3 Analyzing the Effects of Transactions Using T-Accoun
ID: 2407983 • Letter: 2
Question
21. value 0.42 points PA3-3 Analyzing the Effects of Transactions Using T-Accounts, Preparing an Unadjusted Trial 2 , LO 3-3, LO 3-4, LO 3-5] Spicewood Stables, Inc. 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 1. Received contributions from investors and issued $350,000 of common stock on April 1 2. Built a barn and other buildings for $228,000. On April 2, the company paid half the amount in cash on April 1 and signed a three-year note payable for the balance 3. Provided $17,800 in animal care services for customers on April 3, all on credit. 4. Rented stables to customers who cared for their own animals: received cash of $12,000 on April 4. 5. On April 5, received $2,700 cash from a customer to board her horse in May, June, and July (record as Uneaned Revenue) 6. Purchased hay and feed supplies on account on April 6 for $5,100. 7. Paid $1,860 on accounts payable on April 7 for previous purchases. 8. Received $1,860 from customers on April 8 on accounts receivable 9. On April 9, prepaid a two-year insurance policy for $4.200. for coverage starting in May 10.On April 28, paid $1,350 in cash for water utilities incurred in the month. 11.Paid $16,000 in wages on April 29 for work done this month. 12.Received an electric utility bill on April 30 for $2.220 for usage in April; the bill will be paid next month. Required: 1. Prepare the journal entry for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaction listExplanation / Answer
Journal entries
Date
Account Title
Debit
Credit
1-Apr
Cash
$ 350,000.00
Comon Stock
$ 350,000.00
(common stock issued)
2-Apr
Barn and Building
$ 228,000.00
cash
$ 114,000.00
Notes Payable
$ 114,000.00
(Notes payaple for asset.
3-Apr
Accounts Receivable
$ 17,800.00
Service revenue
$ 17,800.00
(service revenue earned)
4-Apr
Cash
$ 12,000.00
Rental Income
$ 12,000.00
(rental income received in cash)
5-Apr
Cash
$ 2,700.00
Unearned revenue
$ 2,700.00
(Advance for service to be rendered)
6-Apr
Supplies
$ 5,100.00
Accounts Payable
$ 5,100.00
(supplies purchased)
7-Apr
Accounts Payable
$ 1,860.00
Cash
$ 1,860.00
(cash paid for credit balance)
8-Apr
Cash
$ 1,860.00
Accounts Receivable
$ 1,860.00
(Cash received)
9-Apr
Prepaid insurance
$ 4,200.00
Cash
$ 4,200.00
(insurance paid in advance)
28-Apr
Utilities
$ 1,350.00
Cash
$ 1,350.00
(cash paid for supplies bill)
29-Apr
Wages
$ 16,000.00
Cash
$ 16,000.00
(wages paid in cash)
30-Apr
Electricity expenses
$ 2,220.00
Accrued Expenses
2220
$ 643,090.00
$ 643,090.00
Cash Account
1-Apr
Common Stock
$ 350,000.00
2-Apr
Barn and Building
$ 114,000.00
4-Apr
Rental Income
$ 12,000.00
7-Apr
Accounts Payable
$ 1,860.00
5-Apr
Unearned Income
$ 2,700.00
9-Apr
Prepaid Insurance
$ 4,200.00
7-Apr
Accounts Receivable
$ 1,860.00
28-Apr
Utilities
$ 1,350.00
29-Apr
Wages
$ 16,000.00
30-Apr
Closing Balance
$ 229,150.00
$ 366,560.00
$ 366,560.00
Accounts Receibables
3-Apr
Service Revenue
17800
7-Apr
Cash
$ 1,860.00
30-Apr
Closing Balance
$ 15,940.00
$ 17,800.00
$ 17,800.00
Common Stock
30-Apr
Closing Balance
$ 350,000.00
1-Apr
Cash
$ 350,000.00
$ 350,000.00
$ 350,000.00
Barn and Building
2-Apr
Notes Payable
$ 114,000.00
30-Apr
Closing Balance
$ 228,000.00
Cash
$ 114,000.00
$ 228,000.00
$ 228,000.00
Accounts Payable
7-Apr
Cash
$ 1,860.00
6-Apr
Supplies
$ 5,100.00
30-Apr
Closing Balance
$ 3,240.00
$ 5,100.00
$ 5,100.00
Rental Income
30-Apr
Closing Balance
$ 12,000.00
4-Apr
Cash
$ 12,000.00
$ 12,000.00
$ 12,000.00
service Revenue
30-Apr
Closing Balance
$ 17,800.00
3-Apr
Accounts Receivable
17800.0
$ 17,800.00
$ 17,800.00
Prepaid Insurance
9-Apr
Cash
$ 4,200.00
30-Apr
Closing Balance
$ 4,200.00
$ 4,200.00
$ 4,200.00
Unearned Revenue
30-Apr
Closing Balance
$ 2,700.00
5-Apr
Cash
$ 2,700.00
$ 2,700.00
$ 2,700.00
Wages
29-Apr
Cash
$ 16,000.00
30-Apr
Closing Balance
$ 16,000.00
$ 16,000.00
$ 16,000.00
Utilities
28-Apr
Cash
$ 1,350.00
30-Apr
Closing Balance
$ 1,350.00
$ 1,350.00
$ 1,350.00
Supplies
6-Apr
Accounts Payable
$ 5,100.00
30-Apr
Closing Balance
$ 5,100.00
$ 5,100.00
$ 5,100.00
Electricity Expenses
30-Apr
Accrued Expenses
$ 2,220.00
30-Apr
Closing Balance
$ 2,220.00
$ 2,220.00
$ 2,220.00
Notes Payable
30-Apr
Electricity Expenses
$ 114,000.00
2-Apr
Barn and Building
$ 114,000.00
$ 114,000.00
$ 114,000.00
Accrued Expenses
30-Apr
Closing Balance
$ 2,220.00
30-Apr
Electricity Expenses
$ 2,220.00
$ 2,220.00
$ 2,220.00
Trial Balance
Spicewoods stables
30st april
Account title
Debit
Credit
Cash
$ 229,150.00
Accounts Recivables
$ 15,940.00
Accounts Payable
$ 3,240.00
Service revenue
17800.0
Utilities
$ 1,350.00
Suppplies
$ 5,100.00
wages
$ 16,000.00
rental income
$ 12,000.00
Unearned revenue
$ 2,700.00
Common Strock
$ 350,000.00
Barns and Building
$ 228,000.00
Electricity Expenses
$ 2220
Notes Payable
$ 114,000.00
Prepaid Insurance
$ 4200
Accrued Expenses
2220
Total
$ 501,960.00
$ 501,960.00
Primary net income
$ 29,800.00
Net profit
$ 10,230.00
Net Profit Margin
34%
Net Profit margin is better than the competitor by 4%
Income Statement
Spicewoods stables
31st april 2017
rental income
$ 12,000.00
Service revenue
$ 17,800.00
$ 29,800.00
Expenses
Utilities
$ 1,350.00
wages
$ 16,000.00
Electricity Expenses
$ 2220
$ 19,570.00
Net Income during Period
$ 10,230.00
Journal entries
Date
Account Title
Debit
Credit
1-Apr
Cash
$ 350,000.00
Comon Stock
$ 350,000.00
(common stock issued)
2-Apr
Barn and Building
$ 228,000.00
cash
$ 114,000.00
Notes Payable
$ 114,000.00
(Notes payaple for asset.
3-Apr
Accounts Receivable
$ 17,800.00
Service revenue
$ 17,800.00
(service revenue earned)
4-Apr
Cash
$ 12,000.00
Rental Income
$ 12,000.00
(rental income received in cash)
5-Apr
Cash
$ 2,700.00
Unearned revenue
$ 2,700.00
(Advance for service to be rendered)
6-Apr
Supplies
$ 5,100.00
Accounts Payable
$ 5,100.00
(supplies purchased)
7-Apr
Accounts Payable
$ 1,860.00
Cash
$ 1,860.00
(cash paid for credit balance)
8-Apr
Cash
$ 1,860.00
Accounts Receivable
$ 1,860.00
(Cash received)
9-Apr
Prepaid insurance
$ 4,200.00
Cash
$ 4,200.00
(insurance paid in advance)
28-Apr
Utilities
$ 1,350.00
Cash
$ 1,350.00
(cash paid for supplies bill)
29-Apr
Wages
$ 16,000.00
Cash
$ 16,000.00
(wages paid in cash)
30-Apr
Electricity expenses
$ 2,220.00
Accrued Expenses
2220
$ 643,090.00
$ 643,090.00
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