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The following information applies to the questions displayed below.]      The general ledger of Jackrabbit Rentals...

The following information applies to the questions displayed below.]
    

The general ledger of Jackrabbit Rentals at January 1, 2021, includes the following account balances:

Accounts Debits Credits
Cash $ 51,500
Accounts Receivable 35,700
Land 120,800
Accounts Payable 16,300
Notes Payable (due in 2 years) 40,000
Common Stock 110,000
Retained Earnings 41,700
Totals $ 208,000 $ 208,000

The following is a summary of the transactions for the year:

1. January 12 Provide services to customers on account, $72,400.
2. February 25 Provide services to customers for cash, $80,300.
3. March 19 Collect on accounts receivable, $46,700.
4. April 30 Issue shares of common stock in exchange for $40,000 cash.
5. June 16 Purchase supplies on account, $14,100.
6. July 7 Pay on accounts payable, $12,300.
7. September 30 Pay salaries for employee work in the current year, $74,200.
8. November 22 Pay advertising for the current year, $23,500.
9. December 30 Pay $3,900 cash dividends to stockholders.

The following information is available for the adjusting entries.

Accrued interest on the notes payable at year-end amounted to $3,500 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $2,500 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $3,300.

Prepare a classified balance sheet for the year ended December 31, 2021.

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Solution

Jackrabbit Rentals

Classified balance sheet

Jackrabbit Rental

Classified Balance Sheet

For the Year Ended December 31, 2021

Assets

Current Assets

Cash

$104,600

Accounts Receivable

$61,400

Supplies

$3,300

Current Assets Total

1,69,200

Fixed Assets

Land

1,20,800

Total Assets

$290,100

Liabilities and Stockholders' Equity

Liabilities

Current Liabilities

Accounts Payable

$18,100

Salaries Payable

$2,500

Interest Payable

$3,500

Current Liabilities

$24,100

Long-term Liabilities

Notes Payable

$40,000

Liabilities

$64,100

Stockholders' Equity

Common Stock

$150,000

Retained Earnings

$76,000

$226,000

$290,100

Computations:

T – Accounts

Cash

Description

Amount

Description

Amount

Beg. Balance

51,500

Accounts Payable

12,300

Service Revenue

80,300

Salaries Expense

74,200

Accounts Receivable

46,700

Advertising expense

23,500

Common Stock

40,000

Dividends

3,900

Ending balance

1,04,600

Accounts Receivable

Description

Amount

Description

Amount

Beg. Balance

35,700

Cash

46,700

Service Revenue

72,400

Ending balance

61,400

Accounts Payable

Description

Amount

Description

Amount

Cash

12,300

Beg. Balance

16,300

Supplies

14,100

Ending balance

18,100

Supplies

Description

Amount

Description

Amount

Accounts Payable

14,100

Supplies Expense

10,800

Ending balance

3,300

Service Revenue

Description

Amount

Description

Amount

Accounts Receivable

72,400

Cash

80,300

Ending balance

1,52,700

Common Stock

Description

Amount

Description

Amount

Beg. Balance

1,10,000

Cash

40,000

Ending balance

1,50,000

Salaries Expense

Description

Amount

Description

Amount

Cash

74,200

Salaries Payable

2,500

Ending balance

76,700

Salaries Payable

Description

Amount

Description

Amount

Salaries expense

2,500

Ending balance

2,500

Income Statement

For the Year Ended December 31, 2021

Service Revenue

$152,700

Expenses:

Salaries expense

76,700

Supplies expense

10,800

Advertising expense

23,500

Interest Expense

3,500

Total expenses

$114,500

Net income

38,200

Retained earnings statement:

Beg. Balance 41,700

Add: net income 38,200

Subtotal 79,900

Less: dividends paid 3,900

Ending balance 76,000

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