The following is the pre-adjusted trial balance of JetCo Fuel Services as of December 31, 2008.

Additional Information:

a. A fuel tanker was purchased July 1, 2008 by issuing a three-year 10% interest-bearing note payable for \($75,000\). The tanker is expected to last 10 years and then be scrapped. JetCo uses the straight-line depreciation method.

b. After taking a physical inventory, it was discovered that fuel inventories were overstated by \($6,100.

c.\) Equipment on the balance sheet was acquired January 1, 2007 and has a 10-year life.

d. A search of unrecorded liabilities reveals unrecorded fuel expenses of \($4,800.

e.\) A 36-month insurance policy was acquired for \($72,000\) on August 31, 2008, and charged to Insurance expense.

f. On June 1, 2008, one-year’s rent (\($12,000)\) was paid and charged to rent expense.
g. The balance in the Customer deposits account was earned in 2008.
h. During 2008, JetCo paid a dividend of \($75,000,\) which was subtracted from Retained
earnings.
Required:
1. Prepare any required adjustments as of December 31, 2008.
2. Prepare JetCo’s income statement for the year ending 2008 and its balance sheet.

Transcribed Image Text:

Pre-Adjusted Trial Balance December 31, 2008 Debits Credits Cash $ 39,800 Accounts receivable, net 70,700 Fuel inventory 42,600 Equipment 30,000 Fuel tanker 75,000 Accumulated depreciation 3,000 Accounts payable 35,100 Accrued expenses 12,500 Customer deposits 2,400 Notes payable 75,000 JetCo capital stock 75,000 Retained earnings 15,300 Fuel sales 840,000 Fuel expense 641,200 Salary expense 75,000 Insurance expense 72,000 Rent expense 12,000 $1,058,300 $1,058,300