Question

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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.

Answer 1

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