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Exercise 2 - trans analysis and prepare finl state_1

Exercise 2 - trans analysis and prepare finl state_1 -...

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GB 112 Review Session Financial Statements, GAAP and Transaction Analysis Exercise 2 Spicewood Stables, Inc. was established in Austin, Texas, on April 1, 2010. The company provides stables, care for animals, and grounds for riding and showing horses. Analyze the following April transactions and show their effect on the accounting equation using the table provided. Add account titles under “Assets” and “Liabilities” as needed. For any items affecting Retained Earnings, indicate if it is a revenue (Rev), expense (Exp), or dividend (Div) in the last column. After analyzing and recording the transaction in the table, prepare an income statement, statement of retained earnings and balance sheet. a. Received contributions from five investors of $50,000 in cash ($10,000 each), a barn valued at $100,000, land valued at $60,000, and supplies valued at $2,000. Each investor received 3,000 shares of stock. b. Built a small barn for $42,000. The company paid half the amount in cash on April 1, 2010, and signed a
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Unformatted text preview: three-year note payable for the balance. c. Provided $15,260 in animal care services for customers, all on account. d. Rented stables to customers who cared for their own animals; received cash of $13,200. e. Received from a customer $1,500 to board her horse in May, June, and July. f. Purchased hay and feed supplies on account for $3,210 to be used in the summer. g. Paid $840 in cash for water utilities incurred in the month. h. Paid $1,700 on accounts payable for previous balances. i. Received $1,000 from customers on accounts receivable. j. Paid $4,000 in wages to employees who worked during the month. k. At the end of the month, purchased a two-year insurance policy for $3,600. l. Received an electric utility bill for $1,200 for usage in April; the bill will be paid next month. m. Paid $100 cash dividend to each of the investors at the end of the month....
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