E3-10 (Algo) Analyzing the Effects of Transactions in T-Accounts and Computing Cash Basis versus Accrual Basis Net Income LO3-3, 3-4

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[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	$	6,200	Accounts payable	$	9,000
Accounts receivable		30,700	Unearned revenue		2,940
Supplies		1,530	Long-term note payable		47,800
Equipment		10,300	Common stock		1,540
Land		8,100	Additional paid-in capital		6,160
Building		26,500	Retained earnings		15,890

1. Rebuilt and delivered five pianos in January to customers who paid $18,400 in cash.
2. Received a $500 deposit from a customer who wanted her piano rebuilt.
3. Rented a part of the building to a bicycle repair shop; received $850 for rent in January.
4. Received $8,000 from customers as payment on their accounts.
5. Received an electric and gas utility bill for $510 to be paid in February.
6. Ordered $900 in supplies.
7. Paid $2,040 on account in January.
8. Received from the home of Stacey Eddy, the major shareholder, a $990 tool (equipment) to use in the business in exchange for 100 shares of $1 par value stock.
9. Paid $14,400 in wages to employees who worked in January.
10. Declared and paid a $2,000 dividend (reduce Retained Earnings and Cash).
11. Received and paid cash for the supplies in (f).

E3-10 Part 4

4. What is net income if Staceys used the cash basis of accounting?

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! 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 6,200 30,700 1,530 10,300 8,100 26,500 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings $ 9,000 2,940 47,800 1,540 6,16e 15,898 a. Rebuilt and delivered five pianos in January to customers who paid $18.400 in cash. b. Received a $500 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop: received $850 for rent in January. d. Received $8.000 from customers as payment on their accounts. e. Received an electric and gas utility bill for $510 to be paid in February f. Ordered $900 in supplies. 9. Paid $2,040 on account in January h. Received from the home of Stacey Eddy, the major shareholder, a $990 tool (equipment) to use in the business in exchange for 100 shares of $1 par value stock. i. Paid $14.400 in wages to employees who worked in January j. Declared and paid a $2.000 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f). E3-10 Part 4 4. What is net income if Stacey's used the cash basis of accounting? Net income