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 0 Supplies Expense 0 Utilities Expense 10,700 Interest Expense 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

Credit Debit $216,400 $216,400 $206,590 Date General Journal December 31 Service Revenue 2018 Income Summary Account (To record closure of service revenue to Income Summary Account) December 31 Income Summary Account 2018 Salaries expense Depreciation expense Insurance expense Supplies expense Utilities expense Interest expense (To record closure of expenses to Income Summary Account) December 31 Retained Earnings 2018 Dividend (To record closure of dividend to Retained earnings $154,200 $8,700 $13,500 $16,200/12*10 $16,800 $20,500-$3,700 $12,250 $1,140 $28,500*12%*4/12 $1,700 $1,700 7 Credit Jaguar Auto Company Post Closing Trial Balance December 31, 2018 Accounts Debit Cash $15,500 Accounts receivable $13,700 Supplies $3,700 Prepaid Insurance $2,700 Equipment $82,000 Accumulated Depreciation- Equipment Accounts payable Salaries payable Utilities payable Interest payable Notes payable Common stock Retained Earnings Totals $117,600 $34,200 $10,700 $2,700 $1,550 $1,140 $28,500 $22,000 $16,810 $117,600