Question

The adjusted trial balance of Bennett Irrigation System at December 31, 2018​, follows:

X i Data Table Bennett Irrigation System Adjusted Trial Balance December 31, 2018 Balance Account Title Debit Credit Cash 15,800 Accounts Receivable 49,200 Office Supplies 8,900 Prepaid Insurance 5,300 Building 62,000 Accumulated Depreciation-Building 24.800_ Print Done

Requirement 1. Prepare the​ company's income statement for the year ended December 31, 2018.

​(If a box is not used in the​ statement, leave the box​ empty; do not select a label or enter a zero. Use a minus sign or parentheses to show a net​ loss.)

Requirement 2. Prepare the​ company's statement of retained earnings for the year ended December 31, 2018.

Enter any increases in retained earnings prior to the subtotal and any decreases to retained earnings below the subtotal.

Requirement 3. Prepare the​ company's classified balance sheet in report form at December 31, 2018.

​(If a box is not used in the balance​ sheet, leave the box​ empty; do not select a label or enter a​ zero.)

Requirement 4. Journalize the closing entries for Bennett Irrigation System. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)

Start by closing revenues.

Answer 1

61,500 Bennett Irrigation System Income Statement For the Year Ended December 31, 2018 Service Revenue Expenses Insurance Expense Salaries Expense Supplies Expense Interest Expense Depreciation Expense- Building Depreciation Expense-Equipment Total Expenses Net Income (Loss) 1,000 15,600 1,300 400 2,800 1,200 22,300 Statement of Retained Earnings For the Year Ended December 31, 2018 Retained Earnings, January 1, 2018 Net Income (Loss) Less: Dividends Retained Earnings, December 31, 2018 6,000 39,200 (2,500) 42,700

Bennett Irrigation System Balance Sheet As of December 31, 2018 Assets Current Assets Cash Accounts Receivable Office Supplies Prepaid Insurance Total Current Assets 15,800 49,200 8,900 5,300 79,200 Fixed Assets Building Accumulated Depreciation-Building Equipment Accumulated Depreciation Equipment Total Fixed Assets Total Assets 62,000 (24,800) 37,200 23,000 (7,800) 15,200 52,400 131,600 Liabilities & Stockholders Equity Current Liabilities Accounts Payable Interest Payable Salaries Payable Unearned Revenue Total Current Liabilities 28,400 400 2,900 1,300 33,000 Long-term Liabilities Notes Payable (long-term) Total Liabilities 41,900 74,900 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 14,000 42,700 56,700 131,600

Credit Calculation Bennett Irrigation System Journal entries Date Account 31-Dec Service Revenue Clos. (1) Income Summary To close revenue Debit $ 61,500 $ 61,500 $ 22,300 $ 1,000 31-Dec Income Summary Clos. (2) Insurance Expense Salaries Expense Supplies Expense Interest Expense Depreciation Expense- Building Depreciation Expense -Equipment To close expenses $ $ $ $ 1,300 400 2,800 1,200 $ 39,200 =61,500-22,300 31-Dec Income Summary Clos. (3) Retained Earnings To close income summary $ 39,200 $ 2,500 $ 2,500 Clos. (4) Dividends To close dividends

Req5 Current Ratio Current Assets/ Current Liabilities =79,200/33,000 2.40 Current Ratio Company's ability to pay debts has D ETERIORATED Current ratio has declined from 2.6 at Dec 31, 2017 to 2.4 at Dec 31, 2018