Question

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

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.
Record 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. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

To create a T-account balance sheet for the bank, list the assets (reserves, government bonds, and loans) and liabilities (deposits). The bank's assets total $620 and liabilities are $400, resulting in a net worth of $220.

Step-by-step explanation:

To answer the question, we need to create a T-account balance sheet for the bank and calculate its net worth. A T-account balance sheet consists of two columns, one for assets and one for liabilities, which reflects the company's financial position at a specific point in time. In this case, assets and liabilities of the bank are as follows:

Assets:

• 
  
• 
  
• 
  

Liabilities:

• 
  

Considering the bank's assets and liabilities, we can calculate the bank's equity or net worth by subtracting liabilities from assets.

Total Assets = Reserves + Government Bonds + Loans = $50 + $70 + $500 = $620

Total Liabilities = Deposits = $400

Net Worth = Total Assets - Total Liabilities = $620 - $400 = $220

Therefore, the bank's net worth is $220.