Question

Wilburton Riding Stables provides stables, care for animals, and grounds for riding and showing horses. The account balances at the beginning of 2011 were:
During 2011, the following transactions occurred:
a. Wilburton provided animal care services, all on credit, for $210,300. Wilburton rented stables to customers for $20,500 cash. Wilburton rented its grounds to individual riders, groups, and show organizations for $41,800 cash.
b. There remains $15,600 of accounts receivable to be collected at December 31, 2011.
c. Feed in the amount of $62,900 was purchased on credit and debited to the supplies account.
d. Straw was purchased for $7,400 cash and debited to the supplies account.
e. Wages payable at the beginning of 2011 were paid early in 2011. Wages were earned and paid during 2011 in the amount of $112,000.
f. The income taxes payable at the beginning of 2011 were paid early in 2011.
g. Payments of $73,000 were made to creditors for supplies previously purchased on credit.
h. One year’s interest at 9 percent was paid on the note payable on July 1, 2011.
i. During 2011, Jon Wilburton, a principal stockholder, purchased a horse for his wife, Jennifer, to ride. The horse cost $7,000, and Wilburton used his personal credit to purchase it.
The horse is stabled at the Wilburtons’ home rather than at the riding stables.
j. Property taxes were paid on the land and buildings in the amount of $17,000.
k. Dividends were declared and paid in the amount of $7,200.
The following data are available for adjusting entries:
• Supplies (feed and straw) in the amount of $30,400 remained unused at year-end.
• Annual depreciation on the buildings is $6,000.
• Annual depreciation on the equipment is $5,500.
• Wages of $4,000 were unrecorded and unpaid at year-end.
• Interest for six months at 9 percent per year on the note is unpaid and unrecorded at year-end.
• Income taxes of $16,500 were unpaid and unrecorded at year-end.
Required:
1. Post the 2011 beginning balances to T-accounts. Prepare journal entries for transactions (a) through (k) and post the journal entries to T-accounts adding any new T-accounts you need.
2. Prepare the adjustments and post the adjustments to the T-accounts adding any new T-accounts you need.
3. Prepare an income statement.
4. Prepare a retained earnings statement.
5. Prepare a classified balance sheet.
6. Prepare closing entries.
7. Did you include transaction (i) among Wilburton’s 2011 journal entries? Why or why not?


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  • CreatedSeptember 22, 2015
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