PA3-3 Analyzing the Effects of Transactions Using T-Accounts, Preparing an Unadjusted Trial Balance, and Determining Net Income [LO 3-1, LO 3-2, LO 3-3, LO 3-4]

Spicewood Stables, Inc., was established in Dripping Springs, Texas, on April 1, 2013. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new Assistant Controller. The following transactions for April 2013 are provided for your review.

a.	Received contributions from five investors of $150,000 in cash ($30,000 each).
b.	Built a barn and other buildings for $205,000. The company paid half the amount in cash on April 1 and signed a three-year note payable for the balance.
c.	Provided $23,500 in animal care services for customers, all on credit.
d.	Rented stables to customers who cared for their own animals; received cash of $22,000.
e.	Received from a customer $1,550 to board her horse in May, June, and July (record as Unearned Revenue).
f.	Purchased hay and feed supplies on account for $3,200.
g.	Paid $1,100 in cash for water utilities incurred in the month.
h.	Paid $1,720 on accounts payable for previous purchases.
i.	Received $1,820 from customers on accounts receivable.
j.	Paid $6,500 in wages to employees who worked during the month.
k.	At the end of the month, prepaid a two-year insurance policy for $4,600.
l.	Received an electric utility bill for $2,260 for usage in April; the bill will be paid next month. Required: 2. Record in the T-accounts the effects of each transaction for Spicewood Stables in April, referencing each transaction in the accounts with the transaction letter. Show the unadjusted ending balances in the T-accounts. Cash Accounts Receivable Supplies Prepaid Insurance Buildings Accounts Payable Unearned Revenue Long-term Notes Payable Contributed Capital Service Revenue Rent Revenue Utilities Expense Salaries and Wages Expense

3.

Prepare an unadjusted trial balance as of April 30, 2013. SPICEWOOD STABLES, INC. Unadjusted Trial Balance At April 30, 2013 Account Name Debit Credit Cash Accounts Receivable Supplies Prepaid Insurance Buildings Accounts Payable Unearned Revenue Notes Payable (long-term) Contributed Capital Service Revenue Rent Revenue Utilities Expense Salaries and Wages Expense Total 4. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income.