Question

Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: Cash $ 6,900 Accounts Payable $ 8,500 Accounts Receivable 25,250 Deferred Revenue (deposits) 5,200 Supplies 1,350 Notes Payable (long-term) 43,500 Equipment 15,300 Common Stock 15,000 Land 6,900 Retained Earnings 6,200 Building 22,700 Following are the January transactions: a.Received a $865 deposit from a customer who wanted her piano rebuilt in February. b.Rented a part of the building to a bicycle repair shop; $345 rent received for January. c.Delivered five rebuilt pianos to customers who paid $11,925 in cash. d.Delivered two rebuilt pianos to customers for $6,800 charged on account. e.Received $4,800 from customers as payment on their accounts. f.Received an electric and gas utility bill for $440 for January services to be paid in February. g.Ordered $995 in supplies. h.Paid $1,600 on account in January. i.Paid $10,300 in wages to employees in January for work done this month. j.Received and paid cash for the supplies in (g). How to do a income statement for the month ended and at January 31. How to do a statement of retained earnings for the month ended and at January 31. How to do a classified balance sheet for the month ended and at January 31.

Answer 1

Income statement for the month end at jan 31 st
Particulars	Amount($)
Revenues :
sales revenue($11,925+$6800)	$18,725
Rent received	$345
(-)Expenses:
Supplies expenses	$995
electric and gas utility bill	$440
wages paid	$10,300
Net income	$7,335
Balance sheet for the month ended jan 31st
Liabilities	Amount($)	Assets($)	Amount($)
Common stock	$15,000	Current Assets:
Retained earnings	$6,200	cash(working note)	$11,940
jan retained earnings	$7,335	Accounts receivable($25,250+$2000)	$27,250
Current liabiltiies:		Supplies	$1,350
Accounts payable($8500-$1600)	$6,900	Fixed Assets:
electric and gas uttilitybill payable	$440	Equipments	$15,300
Deferred revenue($5200+$865)	$6,065	Land	$6,900
Long term liabilities:		Building	$22,700
Long term notes payable	$43,500
	$85,440		$85,440
Working note
Cash A/c
Particulars	Amount($)	Particulars	Amount($)
op bal	6900	to Acc payable	1600
by customer a/c	865	to wages	10,300
by rent received	345	to supplies	995
by sales	11,925
by sales	4800
		clo bal	11,940
	24,835		24,835