Question

Required information [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 $ 46,500 Accounts Receivable 30,700 Land 115,800 Accounts Payable 15,800 Notes Payable (due in 2 years) 35,000 Common Stock 105,000 Retained Earnings 37,200 Totals $ 193,000 $ 193,000 The following is a summary of the transactions for the year: 1. January 12 Provide services to customers on account, $67,400. 2. February 25 Provide services to customers for cash, $77,800. 3. March 19 Collect on accounts receivable, $46,200. 4. April 30 Issue shares of common stock in exchange for $35,000 cash. 5. June 16 Purchase supplies on account, $13,100. 6. July 7 Pay on accounts payable, $11,800. 7. September 30 Pay salaries for employee work in the current year, $69,200. 8. November 22 Pay advertising for the current year, $23,000. 9. December 30 Pay $3,400 cash dividends to stockholders. The following information is available for the adjusting entries. Accrued interest on the notes payable at year-end amounted to $3,000 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $2,000 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $2,800.

8-a. Prepare an income statement for the year ended December 31, 2021.

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

Answer 1

8-a.)	Income Statement
	For the year ended December 31,2021		Amount $
	Revenue
	Service Revenue (77,800 + 67,400 )		145,200
	Expenses
	Salaries expense	69,200
	Advertising Expense	23,000
	Supplies Expense ( 13,100 - 2,800 )	10,300
	Interest Expense	3,000
	Total Expense		105,500
	Net Income		39,700

8-b.)	Classified Balance Sheet
	For the year ended December 31,2021	Amount $
	Assets
	Current Assets
	Cash	98,100	=46500+77800+46200+35000-11800-69200-23000-3400
	Accounts Receivable	51,900	=30700+67400-46200
	Supplies	2,800
	Non-Current Assets
	Land	115,800
	Total Assets	268,600
	Liabilities & Stockholder's Equity
	Non-Current Liabilities
	Notes Payable	35,000
	Current Liabilities
	Accounts Payable	17,100	=15800+13100-11800
	Interest Payable	3,000
	Stockholder's Equity
	Common Stock	140,000	=35000+105000
	Retained earnings	73,500	=37200-3400+39700
	Total Liabilities & Stockholder's Equity	268,600