Question

The general ledger of Jackrabbit Rentals at January 1, 2021, includes the following account balances:

Accounts	Debits				Credits
Cash	$	44,500
Accounts Receivable		28,700
Land		113,800
Accounts Payable						15,600
Notes Payable (due in 2 years)						33,000
Common Stock						103,000
Retained Earnings						35,400
Totals	$	187,000			$	187,000

The following is a summary of the transactions for the year:

1.		January		12		Provide services to customers on account, $65,400.
2.		February		25		Provide services to customers for cash, $76,800.
3.		March		19		Collect on accounts receivable, $46,000.
4.		April		30		Issue shares of common stock in exchange for $33,000 cash.
5.		June		16		Purchase supplies on account, $12,700.
6.		July		7		Pay on accounts payable, $11,600.
7.		September		30		Pay salaries for employee work in the current year, $67,200.
8.		November		22		Pay advertising for the current year, $22,800.
9.		December		30		Pay $3,200 cash dividends to stockholders.

The following information is available for the adjusting entries.

Accrued interest on the notes payable at year-end amounted to $2,800 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $1,800 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $2,600.

1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 9). Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.

2. Record the adjusting entries in the 'General Journal' tab (these are shown as items 10-12).

3. Review the adjusted 'Trial Balance' as of December 31, 2021.

4. Prepare an income statement for the period ended December 31, 2021, in the 'Income Statement' tab.

5. Prepare a classified balance sheet as of December 31, 2021 in the 'Balance Sheet' tab.

6. Record the closing entries in the 'General Journal' tab (these are shown as items 13-15).

Answer 1

1.

Date	Account Titles	Debit	Credit
Jan-12	Accounts Receivable	$        65,400
	Service Revenue		$        65,400
	(Service provided to customers)
Feb-25	Cash	$        76,800
	Service Revenue		$        76,800
	(Service provided for cash)
Mar-19	Cash	$        46,000
	Accounts Receivable		$        46,000
	(Cash collected from customers)
Apr-30	Cash	$        33,000
	Common Stock		$        33,000
	(Common Stock issued for cash)
Jun-16	Supplies	$        12,700
	Accounts Payable		$        12,700
	(Purchased supplies on account)
Jul-07	Accounts Payable	$        11,600
	Cash		$        11,600
	(cash paid)
Sep-30	Salaries	$        67,200
	Cash		$        67,200
	(Salaries paid in cash)
Nov-22	Advertising Expense	$        22,800
	Cash		$        22,800
	(Cash paid for advertising)
Dec-30	Retained Earnings	$          3,200
	Cash		$          3,200
	(Dividends paid in cash)

2.

Account Titles	Debit	Credit
Interest Expense	$          2,800
Interest Payable		$          2,800
(Interest accrued but not paid)
Salaries expense	$          1,800
Salaries Payable		$          1,800
(Salaries accrued but not paid)
Supplies Expense	$        10,100
Supplies		$        10,100
(Consumption of Supplies)

Consumption of Supplies = $12700 - $2600 = $10100

3.

			Calculations
Account Titles	Debit	Credit
Cash	$        95,500		=44500+76800+46000+33000-11600-67200-22800-3200
Accounts receivable	$        48,100		=28700+65400-46000
Supplies	$          2,600		2600
Land	$     113,800		113800
Accounts Payable		$        16,700	=15600+12700-11600
Interest Payable		$          2,800	2800
Salaries Payable		$          1,800	1800
Notes Payable		$        33,000	33000
Common Stock		$     136,000	=103000+33000
Retained Earnings		$        32,200	=35400-3200
Service Revenue		$     142,200	=65400+76800
Supplies expense	$        10,100		10100
Salaries Expense	$        69,000		=67200+1800
Interest Expense	$          2,800		2800
Advertising Expense	$        22,800		22800
Totals	$     364,700	$     364,700

4. Income Statement

Income Statement
Service Revenue		$     142,200
Expenses
Supplies expense	$        10,100
Salaries Expense	$        69,000
Interest Expense	$          2,800
Advertising Expense	$        22,800
Total Expense		$     104,700
Income		$        37,500