Page 177 - Accounting Principles (A Business Perspective)

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Solution to demonstration problem
a. See the work sheet below.
GREEN HILLS RIDING STABLE, INCORPORATE
Work Sheet
For the Month Ended 2010 July 31
Acct Account Titles Adjusted Income Statement of
. Trial Balance Adjustments Retained Balance Sheet
Balance Statement
Earnings
No. Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
100 Cash 10,700 10,700 10,700
103 Accounts Receivable S,100 3,100 8,100
130 Land 40,000 40,000 40,000
140 Buildings 24,000 24,000 24,000
200 Accounts Payable 1,100 1,100 1,100
201 Notes Payable 40,000 40,0 0 0 40,000
300 Capital Stock 35,000 35,000 35,000
310 Retained Earnings 3,100 3,100 3,100
2010 July 1
320 Dividends 1,000 1,000 1,000
402 Horse Boarding Fees 4,500 4,500 4,500
Revenue
404 Riding and Lesson 3,500 3,600 3,600
Fees Revenue
507 Salaries Expense 1,400 (2) 1,700 1,700
300
513 Feed Expense 1,100 1,100 1,100
540 Interest Expense 200 200 200
563 Miscellaneous 300 SOO SOO
Expense
87,300 37,300
520 Depreciation (1) 200 200
Expense—Buildings 200
141 Accumulated
Depreciation-
Buildings (1) 200 200
200
206 Salaries Payable (2) 300 300
300
EOO 5oo 87,500 37,300
4,000 8,100
Net Income 4,100 4,100
8,100 8,100 1,000 7,200 82,300 76,600
Retained Earnings, 6,200 6,200
2010 July 31
7,200 7,200 S2,S00 32,800
Adjustments:
(i) To record depreciation of
building for July.
(2) To record accrued
salaries of $300.
b.
GREEN HILLS RIDING STABLE, INCORPORATED
General Journal Page 4
Date Account Titles and Post. Debt Credit
Explanation Ref.
201 Adjusting Entries
0
July 3 Depredation Expense— 520 2 0 0
1 Buildings (-SE)
Accumulated Depreciation— 141 2 0 0
Buildings (-A)
To record depreciation
expense.

3 Salaries Expense (-SE) 507 3 0 0
1
Salaries Payable (+L) 206 3 0 0
To record accrued salaries.

c.
GREEN HILLS RIDING STABLE, INCORPORATED
General Journal Page 4

Accounting Principles: A Business Perspective 178 A Global Text