III – Accounting (activities over the month of June): On June 1, 1994, Green Hil
ID: 2487225 • Letter: I
Question
III – Accounting (activities over the month of June): On June 1, 1994, Green Hills Riding Stable, Incorporated, was organized. The following transactions occurred during June:
June 1 Shares of Capital stock were issued for $10,000 cash.
4 A horse stable and riding equipment were rented (and paid for) for the month at a cost of $1,200.
8 Horse feed for the month was purchased on credit, $800.
15 Boarding fees of $3,000 for June were charged to those owning horses that were boarded at the stable. (This amount is due on July 10.)
20 Miscellaneous expenses of $600 were paid.
29 Land was purchased from a savings and loan association by borrowing $40,000 on a note from that association. The loan is due to be repaid in five years. Interest payments are due at the end of each month beginning July 31.
30 Salaries of $700 for the month were paid.
30 Riding and lesson fees were billed to customers in the amount of $2,400. (They are due on July 10.)
Required: (a) Prepare a summary of the above transactions. Use columns headed Cash, Accounts Receivable, Land, Accounts Payable, Notes Payable, capital Stock, and Retained earnings. Determine balances after each transaction to show that the basic equation is in balance. (b) Prepare an income statement for June 1994. (c) Prepare a balance sheet as of June 30, 1994.
Explanation / Answer
GREEN HILLS RIDING STABLE, INCORPORATE
Income Statement
For the Month Ended 2010 June 30
GREEN HILLS RIDING STABLE, INCORPORATED Statement of Retained Earnings For the Month Ended 2010 June 30
GREEN HILLS RIDING STABLE, INCORPORATE
Balance Sheet 2010 June 30
Date Explanation cash Accounts receivable Land Accounts payable Notes payable Cpital+ stock Retained Earning 1-Jun Capital stock issue $10,000 $10,000 4 Rent expenses -1200 ($1,200) 8800 $10,000 ($1,200) 8 Feed expenses $800 -800 8800 $800 $10,000 -2000 15 Boarding fee 3000 3000 8800 3000 800 $10,000 1000 20 miscellanous expenses -600 -600 8200 3000 800 $10,000 400 29 Purchased land by borrowing 40000 40000 8200 3000 40000 800 40000 $10,000 400 30 Salaries paid -700 -700 7500 3000 40000 800 40000 $10,000 -300 30 Riding lesson fees 2800 2800 7500 5800 40000 800 40000 $10,000 2500