Question

CHAPTER 3 The Income Statement Required: For each of the transactions, prepare journal entries. Be sure to categorize each account as an asset (A), liability (L), stockholders' equity (SE), revenue (R), or expense (E). PA3-3 Analyzing the Effects of Transactions Using T-Accounts. Preparing an Unadjusted LO 3-1, 3-2, 3-3, 3-4 Trial Balance, and Determining Net Income and Net Profit Margin 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 $200,000 of common stock on April 1. 2. Built a barn and other buildings for $142,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance. 3. Provided $16,000 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 $13,000 on April 4 for rent earned this month. 5. On April 5, received $1,500 cash from a customer to board her horse in May, June, and July (record as Unearned Revenue). 6. Purchased hay and feed supplies on account on April 6 for $3,000. 7. Paid $1,700 on accounts payable on April 7 for previous purchases. 8. Received $1,000 from customers on April 8 on accounts receivable. 9. On April 9, prepaid a two-year insurance policy for $3,600 for coverage starting in May. 10. On April 28, paid $800 in cash for water and utilities used this month. 17. Paid $14,000 in wages on April 29 for work done this month. 12. Received an electric utility bill on April 30 for $1,200 for usage in April; the bill will be paid next month.

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Date Account Debit Credit Cash Unadjusted Trial Balance: Debit Debit $ 200,000 Account Debit Credit Apr 1 Apr 1 Cash Common Stock (To record receipt of cash) $ 200,000 Apr 1 Apr 4 Apr 5 $ 200,000 Apr 2 $ 13,000 Apr 7 $ 1,500 Apr 9 $ 1,000 Apr 28 Apr 29 $ 124,400 $ 71,000 $ 1,700 $ 3,600 $ 800 $ 14,000 Apr 8 Apr 2 $ 142,000 $ 124,400 $ 15,000 $ 3,600 $ 3,000 $ 142,000 Apr 2 Building Cash Note Payable (To record building) Ending Balance $ 71,000 $ 71,000 Apr 2 Accounts Receivable Debit Cash Accounts Receivable Prepaid Insurance Supplies Building Accounts Payable Note Payable Unearned Revenue Common Stock Rent Revenue Service Revenue Electricity Expense Utilities Expense Wages Expense Apr 3 $ 16,000 Debit Apr 3 Ending Balance $ 1,000 Accounts Receivable Service Revenue (To record service provided) $ 16,000 Apr 8 $ 15,000 $ 2,500 $ 71,000 $ 1,500 $ 200,000 $ 13,000 $ 16,000 Apr 3 $ 16,000 Prepaid Insurance $ 13,000 Debit Apr 4 Apr 4 Cash Rent Revenue (To record cash received for Rent revenue) $ 13,000 Debit Apr 9 Ending Balance $ $ 3,600 3,600 $ $ $ 1,200 800 14,000 $ 1,500 Supplies Total $ 304,000 $ 304,000 Apr 5 Apr 5 Cash Unearned Revenue (To record cash received) $ 1,500 Debit Debit Apr 6 Ending Balance Net Income: $ $ 3,000 3,000 Apr 6 $ 3,000 Apr 6 Supplies Accounts Payable (To record supplies purchased) $ 3,000 Building $ $ $ 13,000 16,000 29,000 Debit Debit Apr 2 Ending Balance $ 142,000 $ 142,000 $ 1,700 Apr 7 Apr 7 Accounts Payable Cash (To record payment made) Rent Revenue Service Revenue Total Revenue Less: Expense Electricity Expense Utilities Expense Wages Expense Total Expense Net Income Net Profit Margin ($13,000/$29,000) $ 1,700 $ $ $ 1,200 800 14,000 Debit Apr 8 $ 1,000 Apr 7 $ Accounts Payable Debit 1,700 Apr 6 Apr 30 Ending Balance Cash Accounts Receivable (To record cash received) Apr 8 $ (16,000) $ 13,000 44.83% $ $ $ $ 1,000 3,000 1,200 2,500

$ 3,600 Apr 9 Apr 9 Prepaid Insurance Cash (To record prepaid insurance) $ 3,600 Debit Note Payable Debit Apr 2 Ending Balance $ 71,000 $ 71,000 $ 800 Apr 28 Apr 28 Utilities Expense Cash (To record payment of utilities) $ 800 Debit Unearned Revenue Debit Apr 5 Ending Balance $ $ 1,500 1,500 $ 14,000 Apr 29 Apr 29 Wages Expense Cash (To record payment of wages expense) $ 14,000 Common Stock Debit Debit $ 1,200 Apr 1 Apr 30 Apr 30 Electricity Expense Accounts Payable (To record electricity expense) $ 200,000 $ 200,000 $ 1,200 Ending Balance Debit Rent revenue Debit Apr 4 Ending Balance $ $ 13,000 13,000 Debit Service Revenue Debit Apr 3 Ending Balance $ $ 16,000 16,000 Utilities Expense Debit Debit Apr 28 Ending Balance $ $ 800 800 Wages Expense Debit Debit Apr 29 Ending Balance $ $ 14,000 14,000