Question

[The following information applies to the questions displayed below.] The general ledger of Jackrabbit Rentals at January 1, 2021, includes the following account balances: Credits Debits $ 52,500 36,700 121,800 Accounts Cash Accounts Receivable Land Accounts Payable Notes Payable (due in 2 years) Common Stock Retained Earnings Totals 16,400 41,000 111,000 42,600 $211,000 $211,000 The following is a summary of the transactions for the year: rovide services to customers on account, $ 73,400. 2. February 25 Provide services to customers for cash, $80,800. 3. March 19 Collect on accounts receivable, $46,800. 4. April 30 Issue shares of common stock in exchange for $41,000 cash. 5. June 16 Purchase supplies on account, $14,300. 6. July 7 Pay on accounts payable, $12,400. 7. September 30 Pay salaries for employee work in the current year, $75,200. 22 Pay advertising for the current year, $23,600. 9. December 30 Pay $4,000 cash dividends to stockholders. The following information is available for the adjusting entries Accrued interest on the notes payable at year-end amounted to $3,600 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $2,600 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $3,400. 8-a. Prepare an income statement for the year ended December 31, 2021. JACKRABBIT RENTALS Income Statement For the Year Ended December 31, 2021 Service Revenue Expenses: Salaries Expense

Answer 1

Solution:

1) Income Statement:

JACKRABBIT RENTALS
Income statement
For the Year Ended, December 31, 2021
Revenue
Service Revenue (73400 + 80800)		$ 154,200
Total Revenue (A)		$ 154,200
Operating Expenses / Expenses
Salaries Expense (75200 + 2600)	$             77,800
Supplies Expense (14300 - 3400)	$             10,900
Interest Expense	$                3,600
Advertisement Expense	$             23,600
Total Expenses (B)		$ 115,900
Net Income (A-B)		$   38,300

Notes;

1) Dividends paid does not come in income statement.

2) Accrued salaries and interest will be expenses for current year. So, these expenses are reflected in income statement.