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E3-13 Recording and Posting Accrual Basis Journal Entries, and Preparing an Unadjusted Trial Balance and Preliminary Financial Statements [LO 3-2, 3-3, LO 3-4]

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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	$	5,900		Accounts Payable	$	12,750
Accounts Receivable		17,250		Deferred Revenue (deposits)		4,150
Supplies		2,600		Notes Payable (long-term)		42,500
Equipment		13,100		Common Stock		13,000
Land		9,350		Retained Earnings		5,800
Building		30,000

Following are the January transactions:

1. Received a $705 deposit from a customer who wanted her piano rebuilt in February.
2. Rented a part of the building to a bicycle repair shop; $640 rent received for January.
3. Delivered five rebuilt pianos to customers who paid $17,525 in cash.
4. Delivered two rebuilt pianos to customers for $9,200 charged on account.
5. Received $6,800 from customers as payment on their accounts.
6. Received an electric and gas utility bill for $475 for January services to be paid in February.
7. Ordered $1,025 in supplies.
8. Paid $3,200 on account in January.
9. Paid $11,900 in wages to employees in January for work done this month.
10. Received and paid cash for the supplies in (g).

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*  Prepare journal entries for the above January transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

*  Post the journal entries to the T-accounts. Show the unadjusted beginning and ending balances in the T-accounts.

* Prepare an unadjusted trial balance at January 31.

Answer 1

Journal entries for the above January transactions is as shown below:

Date	Particulars	L.F	Amount ($)	Amount ($)
a	Cash		705
	Deferred Revenue			705
	(For deposit received)
b	Cash		640
	Rent Revenue			640
	(For cash received for rent)
c	Cash		17,525
	Service Revenue			17,525
	(For piano delivered)
d	Account Receivable		9,200
	Service Revenue			9,200
	(For piano delivered)
e	Cash		6,800
	Account Receivable			6,800
	(For cash received from customers)
f	Utility Expense		475
	Utility Payable			475
	(For utility bill received)
g	No entry
h	Account Payable		3,200
	Cash			3,200
	(for paid to accounts payable)
i	Wages Expense		11,900
	Cash			11,900
	(For wages paid)
j	Supplies		1,025
	Cash			1,025
	(For supplies purchased)

T-accounts

Cash
Particulars	Amount	Particulars	Amount
Opening Balance	5,900	h	3,200
a	705	i	11,900
b	640	j	1,025
c.	17,525
e.	6,800
	31,570		16,125
Closing Balance	15,445
Account Receivable
Particulars	Amount	Particulars	Amount
Opening Balance	17,250	e.	6,800
d.	9,200
	26,450		6,800
Closing Balance	19,650
Supplies
Particulars	Amount	Particulars	Amount
Opening Balance	2,600
j	1,025
	3,625		0
Closing Balance	3,625
Land
Particulars	Amount	Particulars	Amount
Opening Balance	9,350
	9,350		0
Closing Balance	9,350
Equipment
Particulars	Amount	Particulars	Amount
Opening Balance	13,100
Closing Balance	13,100
Building
Particulars	Amount	Particulars	Amount
Opening Balance	30,000
	30,000
Closing Balance	30,000
Accounts Payable
Particulars	Amount	Particulars	Amount
h	3,200	Opening Balance	12,750
	3,200		12,750
		Closing Balance	9,550
Deferred Revenue
Particulars	Amount	Particulars	Amount
		Opening Balance	4,150
		a	705
		Closing Balance	4,855
Notes Payable
Particulars	Amount	Particulars	Amount
		Opening Balance	42,500
		Closing Balance	42,500
Common Stock
Particulars	Amount	Particulars	Amount
		Opening Balance	13,000
		Closing Balance	13,000
Retained Earnings
Particulars	Amount	Particulars	Amount
		Opening Balance	5,800
		Closing Balance	5,800
Rent Revenue
Particulars	Amount	Particulars	Amount
		Opening Balance	0
		b	640
		Closing Balance	640
Service Revenue
Particulars	Amount	Particulars	Amount
		Opening Balance	0
		c.	17,525
		d.	9,200
		Closing Balance	26,725
Utilities payable
Particulars	Amount	Particulars	Amount
		Opening Balance	0
		f	475
		Closing Balance	475
Utility Expense
Particulars	Amount	Particulars	Amount
Opening Balance	0
f	475
Closing Balance	475
Wages Expense
Particulars	Amount	Particulars	Amount
Opening Balance	0
i.	11,900
Closing Balance	11,900

Unadjusted Trial Balance

Ricky's Piano Rebuilding Company
Unadjusted Trial Balance
Jan-31
	Debit	Credit
Cash	15,445
Account Receivable	19,650
Supplies	3,625
Land	9,350
Equipment	13,100
Building	30,000
Accounts Payable		9,550
Deferred Revenue		4,855
Notes Payable		42,500
Common Stock		13,000
Retained Earnings		5,800
Rent Revenue		640
Service Revenue		26,725
Utilities payable		475
Utility Expense	475
Wages Expense	11,900
Total	103,545	103,545