Problem $3-76$B

Comprehensive Problem: Reviewing the Accounting Cycle

Talbot Riding Stables provides stables, care for animals, and grounds for riding and showing horses. The account balances at the beginning of $2022$ were:

During $2022,$ the following transactions occurred:

b$.$ There remains $$15,600$ of accounts receivable to be collected at December $31,2022.$

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 $2022$ were paid early in $2022.$ Wages were earned and paid during $2022$ in the amount of $$112,000.$

f$.$ The income tax payable at the beginning of $2022$ was paid early in $2022.$

g$.$ Payments of $$73,000$ were made to creditors for supplies previously purchased on credit.

h$.$ One year's interest at $9\%$ was paid on the notes payable on July $1,2022.$

i$.$ During $2022,$ Jon Talbot, a principal shareholder, purchased a horse for his wife, Jennifer, to ride. The horse cost $$7,000,$ and Talbot used his personal credit to purchase it$.$

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 $9\%$ 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:

a$.$ Accounts Receivable Prepare the adjustments and post the adjustments to the $T-$accounts. Note: For the $T-$accounts, be sure to complete the posting requirements from part $1$ first.

Dec. $31$

Supplies Expense grad

Supplies

$($Record use of feed supplies$)$

Dec. $31$ Depreciation Expense $($Building$)$

Accumulated Depreciation $($Building$)$ grad

$($Record depreciation on building$)$

Dec. $31$ Depreciation Expense $($Equipment$)$

Accumulated Depreciation $($Equipment$)$

$($Record depreciation on equipment$)$

Dec. $31$ Wages Expense

Wages Payable

$($Record wages due to employees$)$

Dec. $31$ Interest Expense

Interest Payable

$($Record unpaid interest on note$)$

Dec. $31$ Income Tax Expense

Income Tax Payable

$($Record income tax expense$)$

Enter amounts in the same order as given in the journal entries above.

Cash Prepare a statement of earnings.

Talbot Riding Stables

Statement of Earnings

For the Year Ended December $31,2022$

Expenses:

$

Prepare a statement of retained earnings.

Talbot Riding Stables

Statement of Retained Earnings

For the Year Ended December

Prepare a classified statement of financial position.

Talbot Riding Stables

Statement of Financial Position

December $31,2022$

Current assets: Total property, plant, and equipment

Total assets

Liabilities

$

$

Current liabilities:

l

Total current liabilities

Long$-$term liabilities:

Total liabilities

Shareholders' Equity.

shareholders' equity:

$

Total shareholders' equity

Total liabilities and shareholders' equity

$

$shareholders' equity:

$

Total shareholders' equity

Total liabilities and shareholders' equity

$

Prepare closing entries. For those boxes in which no entry is required, leave the box blank.

Dec. $31$

$($

$($Close revenue account$)$

Dec. $31$

$1$

$(.$

$($Close expense accounts$)$

Dec. $31$

$($Close Income Summary$)$

Dec. $31$

$($Close Dividends Declared account$)$

CONCEPTUAL CONNECTION: Did you include transaction i among Talbot's $2022$ journal entries?

Why or why not?

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