REVIEWING THE ACCOUNTING CYCLE. Wilburton Riding Stables provides stables, care for animals, and grounds for riding and
Question:
REVIEWING THE ACCOUNTING CYCLE. Wilburton Riding Stables provides stables, care for animals, and grounds for riding and showing horses. The postclosing account balances for 19x2 were: lol
During 19x38 the following transactions occurred:
a) Wilburton provided animal-care services, all on credit, for $210,300. Wilburton rented stables to customers who cared for their own animals and paid cash of $20,500. Wilburton rented its grounds to individual riders, groups, and show organizations for $41,800 cash.
b) Wilburton collected all the accounts receivable outstanding at December 31, 19x2.
There remains $15,600 of accounts receivable to be collected at December 31, 19x3.
c) Feed in the amount of $62,900 was purchased on credit and debited to the supplies inventory, feed account.
d) Straw was purchased for $7,400 cash and debited to the supplies inventory, straw account.
e) Wages payable at the beginning of 19x3 were paid early in 19x3. Wages were earned and paid during 19x3 in the amount of $112,000.
f) The income taxes payable at the beginning of 19x3 were paid early in 19x3. The accounts payable at the beginning of the year were also paid during the year. There remains $13,600 of accounts payable unpaid at year-end.
g) One year’s interest at 9% was paid on the note payable on July 1, 19x3.
h) During 19x3, Jon Wilburton, owner, purchased a horse for the use of his wife, Jennifer. The horse cost $7,000, and Wilburton used his personal credit to purchase it. The horse is stabled at the Wilburtons’ home rather than at the riding stables.
i) Property taxes were paid on the land and buildings in the amount of $17,000.
j) Dividends were declared and paid in the amount of $7,200. S The following data are available for adjusting entries:
k) Feed in the amount of $26,000 remained unused at year-end. Straw in the amount of $4,400 remained unused at year-end.
1) The buildings are being depreciated over 15 years; residual value: $25,000.
m) The tack is being depreciated over 10 years, with a residual value of $2,000.
n) Wages of $4,000 were unrecorded and unpaid at year-end.
o) Interest for 6 months at 9% per year on the note is unpaid and unrecorded at yearend.
p) The income tax rate is 30%.
REQUIRED: , 1. Post the 19x2 postclosing account balances to T-accounts. Prepare journal entries for transactions a through j and post the journal entries to T-accounts, adding any new T-accounts you need.
2. Prepare the adjustments and post the adjustments to the T-accounts, adding any Ol IS new T-accounts you need.
. Prepare a classified income statement.
Prepare a statement of changes in retained earnings.
. Prepare closing entries.
. Prepare a classified balance sheet.
. Did you include transaction h among Wilburton’s 19x3 journal entries? Why or why not? .
Step by Step Answer:
