Juliet opened an Office Cleaning Service company on January 1, 2021. During the year she had the following transactions. 1) She started the business with investing $25,000 of her own money (business was organized as corporation) 2) She purchased $18,000 equipment in cash. 3) She purchased a truck for $30,000 for business use - paid $5,000 in cash and signed a 3-year note for the rest. 4) She borrowed $20,000 from bank by signing a 5-year note. 5) During the year, purchased $5,500 of supplies in cash. 6) During the year, provided $120000 services to customers of which $100,000 was collected, the rest was not yet collected as of Dec. 31st. 7) During the year, she incurred $80,000 of salaries, rent, utilities, and insurance expenses of which $3000 was still not paid as of Dec. 31st. 8) During the year, she paid $4,000 to bank of which $1200 was for interest and the rest was for payment of the principal of the loan. 9) During the year, she took $6,000 as dividend (dividends paid to shareholders). 10) She sold $800 of unnecessary equipment in cash at cost. 11) During the year, she collected $180 interest from bank on holding bank account 12) In last week of December, she collected $2,000 from a customer in advance for services to be rendered next year. 13) She paid $3,000 to IRS for income tax. 14) Only $800 of the supplies was left on Dec. 31st. 15) Depreciation expense for the year was $2,000. Compute total liabilities as of Dec. 31st.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Juliet opened an Office Cleaning Service company on January 1, 2021. During the year she had the following transactions.

1)	She started the business with investing $25,000 of her own money (business was organized as corporation)
2)	She purchased $18,000 equipment in cash.
3)	She purchased a truck for $30,000 for business use - paid $5,000 in cash and signed a 3-year note for the rest.
4)	She borrowed $20,000 from bank by signing a 5-year note.
5)	During the year, purchased $5,500 of supplies in cash.
6)	During the year, provided $120000 services to customers of which $100,000 was collected, the rest was not yet collected as of Dec. 31^st.
7)	During the year, she incurred $80,000 of salaries, rent, utilities, and insurance expenses of which $3000 was still not paid as of Dec. 31^st.
8)	During the year, she paid $4,000 to bank of which $1200 was for interest and the rest was for payment of the principal of the loan.
9)	During the year, she took $6,000 as dividend (dividends paid to shareholders).
10)	She sold $800 of unnecessary equipment in cash at cost.
11)	During the year, she collected $180 interest from bank on holding bank account
12)	In last week of December, she collected $2,000 from a customer in advance for services to be rendered next year.
13)	She paid $3,000 to IRS for income tax.
14)	Only $800 of the supplies was left on Dec. 31st.
15)	Depreciation expense for the year was $2,000.

Compute total liabilities as of Dec. 31^st.

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