Question

Jaguar Auto Company provides general car maintenance to customers. The company's fiscal year-end is December 31. The December 31, 2018, trial balance (before any adjusting entries) appears below. Accounts Debits Credits Cash $ 15,500 Accounts Receivable 13,700 Supplies 20,500 Prepaid Insurance 16,200 Equipment 82,000 Accumulated $ 25,500 Depreciation Accounts Payable 10,700 Salaries Payable Utilities Payable Interest Payable Notes Payable 28,500 Common Stock 22,000 Retained Earnings 8,700 Dividends 1,700 Service Revenue 216,400 Salaries Expense 151,500 Depreciation Expense 0 Insurance Expense Supplies Expense Utilities Expense 10,700 Interest Expense 0 0 0 Totals $311,800 $ 311,800 Information necessary to prepare the year-end adjusting entries appears below. a. Depreciation on the machines for the year is $8,700. b. Employee salaries are paid every two weeks. The last pay period ended on December 23. Salaries earned from December 24 through December 31, 2018, are $2,700. c. On September 1, 2018, Jaguar borrows $28,500 from a local bank and signs a note. The note requires interest to be paid annually on August 31 at 12%. The principal is due in five years. d. On March 1, 2018, the company purchases insurance for $16,200 for a one-year policy to cover possible injury to mechanics. The entire $16,200 was debited to Prepaid Insurance at the time of the purchase. e. $3,700 of supplies remains on hand at December 31, 2018. f. On December 30, Jaguar receives a utility bill of $1,550 for the month. The bill will not be paid until early January 2019, and no entry was recorded when the bill was received.

Answer 1

Statement of stockholders equity

	Common stock	Retained earnings	Total stockholders equity
Balance at Jan 1	$22,000	$8,700	$30,700
Add: Net income		$9,810
		$18,510
Less: Dividends		($1,700)
Balance at Dec 31	$22,000	$16,810	$38,810

Balance sheet

Assets	Liabilities
Current assets:		Current liabilities
Cash	$15,500	Accounts payable	$10,700
Accounts receivable	$13,700	Salaries payable	$2,700
Supplies	$3,700	Utilities payable	$1,550
Prepaid insurance	$2,700	Interest payable	$1,140
Total current assets	$35,600	Total current liabilities	$16,090
Long term assets:		Long term liabilities
Equipment	$82,000	Notes payable	$28,500
Accumulated depreciation	($34,200)
		Total liabilities	$44,590
		Stockholders equity
		Common stock	$22,000
		Retained earnings	$16,810
		Total stockholders equity	$38,810
Total assets	$83,400	Total liabilities and stockholders equity	$83,400