3. Using the data from the T-accounts, amounts for the following at the end of January of the second year, were: Revenues Expenses = Net income Assets = Liabilities + Stockholders' equity 4. What is net income if Stacey's used the cash basis of accounting? Net income Required: 1 & 2. Enter the following transactions for January of the second year into the T-accounts, using the letter of each transaction as the reference. Cash Accounts Receivable Beg. Bal. Beg. Bal. End. Bal. End. Bal. 0 Supplies Equipment Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Land Building Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Accounts Payable Unearned Revenue Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Common Stock Long-term Note Payable Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Retained Earnings Additional Paid-in Capital Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Rent Revenue Rebuilding Fees Revenue Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Wages Expense Utilities Expense Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Required information E3-10 (Algo) Analyzing the Effects of Transactions in T-Accounts and Computing Cash Basis versus Accrual Basis Net Income LO3-3, 3-4 [The following information applies to the questions displayed below.) Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: $ Cash Accounts receivable Supplies Equipment Land Building 6,900 30,500 1,520 10,400 7,400 26,400 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings $ 9, 100 3, 140 47,700 1,660 6,640 14,880 a. Rebuilt and delivered five pianos in January to customers who paid $18,600 in cash. b. Received a $560 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop; received $910 for rent in January. d. Received $8,200 from customers as payment on their accounts. e. Received an electric and gas utility bill for $450 to be paid in February. f. Ordered $930 in supplies. g. Paid $1,740 on account in January. h. Received from the home of Stacey Eddy, the major shareholder, a $910 tool (equipment) to use in the business in exchange for 140 shares of $1 par value stock. i. Paid $14,500 in wages to employees who worked in January. j. Declared and paid a $2,400 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f)
