In: Accounting
&n
HORSE
RIDING REALTY COMPAMY
BALANCE
SHEET
As
of September 31, 2020
ASSETS
LIABILITY
Cash
$160,000
Accounts
Payable
$100,000
Accounts Rec.
$40,000
Wages
Payable
$50,000
Supplies
$8,000
Note
Payable 6%
$100,000
Prepaid Rent
$11,000
Deferred Revenue
$50,000
Prepaid Ins
$9,000
Total
Liability
$300,000
Equipment
$240,000
EQUITY
Acc.
Depr. $20,000 $220,000
Land
$52,000
Common
Stock
$110,000
Total
Assets
$500,000
Retained
Earnings $ 90,000
Total
Equity
$200,000
Total Liability & Equity
$500,000
- Oct. 1 Horse purchase $10,000 of supplies – paid
cash
- Oct. 2 Horse purchase equipment for $300,000, paid
$60,000 in cash this date and signed a 8% note for the balance.
Full payment of principle and interest due in 2025. This asset has
a useful life of five years.
- Oct. 3 Horse paid $12,000 cash to cover the office rent
for October.
- Oct. 5 Horse billed clients for $25,000 of work
performed.
- Oct. 7 Horse paid employees $50000 in cash for wages
earned for September.
- Oct. 15 Horse sold 40,000 shares in Horse Riding
Reality Stock for $20 a share. Cash was received that afternoon -
Direct deposit.
- Oct. 20 Horse announced a cash dividend of $60,000 to
be paid to shareholders who owned shares on November 1, 2020.
Payment would be made on January 2, 2021.
- Oct. 30 The prepaid insurance listed on the 9/31/20
ending balance sheet was a two year converge period and was placed
on the balance sheet on September 30, 2020.
- Oct. 30 Useful life of equipment listed on the prior
balance sheet is 10 years.
- Commission Fees earned this month were $220,000.
Horse’s accountants realized October 2020 would be the first month
in history that there would be no deferred revenue on the balance
sheet.
- Oct. 31. Balance on the supplies is
$1500.
- Oct. 31 Income Tax Rate for Werner is
20%.
12-B. Prepare and show journal entries for
1-12
- October 31 – Prepare Financial Statements for the Month
of October