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Item 2

Item 2 Part 1 of 3 10 points

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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	$	6,900	Accounts payable	$	8,600
Accounts receivable		30,100	Unearned revenue		3,440
Supplies		1,470	Long-term note payable		47,500
Equipment		10,100	Common stock		1,680
Land		7,500	Additional paid-in capital		6,720
Building		27,100	Retained earnings		15,230

1. Rebuilt and delivered five pianos in January to customers who paid $18,900 in cash.
2. Received a $520 deposit from a customer who wanted her piano rebuilt.
3. Rented a part of the building to a bicycle repair shop; received $890 for rent in January.
4. Received $7,900 from customers as payment on their accounts.
5. Received an electric and gas utility bill for $440 to be paid in February.
6. Ordered $940 in supplies.
7. Paid $1,240 on account in January.
8. Received from the home of Stacey Eddy, the major shareholder, a $910 tool (equipment) to use in the business in exchange for 120 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)

Prepare T accounts

accounting equation

3. Using the data from the T-accounts, amounts for the following at the end of January of the second year, were: Revenues $ 19,790 - Expenses $ 14,840 = Net income $ 4,950 Assets $ 101,150 = Liabilities $ 59,660 + Stockholders' equity $ 41,490

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