Rickys Piano Rebuilding Company has been operating for one year. On January 1, at the start of

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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:
Ricky€™s Piano Rebuilding Company has been operating for one year.

Required:
1. Create T- accounts for the balance sheet accounts and for these additional accounts: Service Revenue, Rent Revenue, Salaries and Wages Expense, and Utilities Expense. Enter the beginning balances.
2. Prepare journal entries for the following January transactions, using the letter of each transaction as a reference:
a. Received a $ 500 deposit from a customer who wanted her piano rebuilt in February.
b. Rented a part of the building to a bicycle repair shop; $ 300 rent received for January.
c. Delivered five rebuilt pianos to customers who paid $ 14,500 in cash.
d. Delivered two rebuilt pianos to customers for $ 7,000 charged on account.
e. Received $ 6,000 from customers as payment on their accounts.
f. Received an electric and gas utility bill for $ 350 for January services to be paid in February.
g. Ordered $ 800 in supplies.
h. Paid $ 1,700 on account in January.
i. Paid $ 10,000 in wages to employees in January for work done this month.
j. Received and paid cash for the supplies in (g).
3. Post the journal entries to the T- accounts. Show the unadjusted ending balances in the T- accounts.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  book-img-for-question

Fundamentals Of Financial Accounting

ISBN: 9780073527109

3rd Edition

Authors: Fred Phillips, Robert Libby, Patricia A Libby

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