Problem $3-76$B

Comprehensive Problem: Reviewing the Accounting Cycle

Talbot Riding Stables provides stables, care for animals, and grounds for riding and showing horses. The account balances at the beginning of $2022$ were:

Cash $ $2,200$ Accounts Payable $ $23,700$

Accounts Receivable $4,400$ Income Tax Payable $15,100$

Supplies $($Feed and Straw$)27,800$ Interest Payable $2,700$

Land $167,000$ Wages Payable $14,200$

Buildings $115,000$ Notes Payable $($due in $2026)60,000$

Accumulated Depreciation $($Buildings$)36,000$ Common Shares $150,000$

Equipment $57,000$ Retained Earnings, $12/31/202155,200$

Accumulated Depreciation $($Equipment$)16,500$

During $2022,$ the following transactions occurred:

Talbot provided animal care services, all on credit, for $$210,300.$ Talbot rented stables to customers for $$20,500$ cash. Talbot rented its grounds to individual riders, groups, and show organizations for $$41,800$ cash.

There remains $$15,600$ of accounts receivable to be collected at December $31,2022.$

Feed in the amount of $$62,900$ was purchased on credit and debited to the supplies account.

Straw was purchased for $$7,400$ cash and debited to the supplies account.

Wages payable at the beginning of $2022$ were paid early in $2022.$ Wages were earned and paid during $2022$ in the amount of $$112,000.$

The income tax payable at the beginning of $2022$ was paid early in $2022.$

Payments of $$73,000$ were made to creditors for supplies previously purchased on credit.

One year's interest at $9\%$ was paid on the notes payable on July $1,2022.$

During $2022,$ Jon Talbot, a principal shareholder, purchased a horse for his wife, Jennifer, to ride. The horse cost $$7,000,$ and Talbot used his personal credit to purchase it$.$

Property taxes were paid on the land and buildings in the amount of $$17,000.$

Dividends were declared and paid in the amount of $$7,200.$

The following data are available for adjusting entries:

Supplies $($feed and straw$)$ in the amount of $$30,400$ remained unused at year$-$end.

Annual depreciation on the buildings is $$6,000.$

Annual depreciation on the equipment is $$5,500.$

Wages of $$4,000$ were unrecorded and unpaid at year$-$end.

Interest for six months at $9\%$ per year on the note is unpaid and unrecorded at year$-$end.

Income taxes of $$16,500$ were unpaid and unrecorded at year$-$end.

Required:

Question Content Area

Wages Expense

$112,000$

Cash

$112,000$

$($Record payment to employees$)$

f$.$

Income Tax Payable

$15,100$

Cash

$15,100$

$($Record payment of income tax$)$

g$.$

Accounts Payable

$73,000$

Cash

$73,000$

$($Record payment on account$)$

h$.$

Interest Expense

$2,700$

Interest Payable

$2,700$

Cash

$5,400$

$($Record payment of interest$)$

i$.$

No entry required

j$.$

Property Taxes Expense

$17,000$

Cash

$17,000$

$($Record payment of property taxes$)$

k$.$

Dividends Declared

$7,200$

Cash

$7,200$

$($Record payment of dividends declared$)$

Question Content Area

$2.$ Prepare the adjustments and post the adjustments to the T$-$accounts. Note: For the T$-$accounts, be sure to complete the posting requirements from part $1$ first.

Dec. $31$

Supplies Expense

$67,700$

Supplies

$67,700$

$($Record use of feed supplies$)$

Dec. $31$

Depreciation Expense $($Building$)$

$6,000$

Accumulated Depreciation $($Building$)$

$6,000$

$($Record depreciation on building$)$

Dec. $31$

Depreciation Expense $($Equipment$)$

$5,500$

Accumulated Depreciation $($Equipment$)$

$5,500$

$($Record depreciation on equipment$)$

Dec. $31$

Wages Expense

$4,000$

Wages Payable

$4,000$

$($Record wages due to employees$)$

Dec. $31$

Interest Expense

$2,700$

Interest Payable

$2,700$

$($Record unpaid interest on note$)$

Dec. $31$

Income Tax Expense

$16,500$

Income Tax Payable

$16,500$

$($Record income tax expense$)$

Question Content AreaEnter amounts in the same order as given in the journal entries above.

Cash

Bal. fill in the blank c$5$a$14$cf$47$fe$2052\_1$

$2,200$

$($d$)$ fill in the blank c$5$a$14$cf$47$fe$2052\_2$

$7,400$

$($a$)$ fill in the blank c$5$a$14$cf$47$fe$2052\_3$

$62,300$

$($e$)$ fill in the blank c$5$a$14$cf$47$fe$2052\_4$

$14,200$

$($b$)$ fill in the blank c$5$a$14$cf$47$fe$2052\_5$

$199,100$

$($e$)$ fill in the blank c$5$a$14$cf$47$fe$2052\_6$

$112,000$

$($f$)$ fill in the blank c$5$a$14$cf$47$fe$2052\_7$

$15,100$

$($g$)$ fill in the blank c$5$a$14$cf$47$fe$2052\_8$

$73,000$

$($h$)$ fill in