The T-accounts of Longhorn Company at the end of the third year of operations, December 31, 2012, follow. The adjusting entries at December 31 are identified by letters.

2. Write an explanation for each adjusting entry for 2012.
3. Prepare the closing journal entries.
4. What was the apparent useful life of the service equipment? What assumptions must you make to answer this question?
5. What was the average income tax rate for 2012 ?
6. What was the average issue (sale) price per share of the share capital?

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Cash Bal. 20,000 Inventory, Maintenance Supplics Bal. 500 (a) Service Equipment 1/1/2010 90,000 Accumulated Depreciation, Service Equipment 300 Note Payable 8% 1/1/2011 10,000 Interest Payable (b) 800 Income Taxes Payable Share Capital (8,000 shares) Bal. Retained Earnings 56,000 Bal. 9,000 Service Revenue 13,020 (c) 6,000 Bal 220,000 (f) Wages Payable Expenses Bal. (1) 18,000 9,000 (e) 500 Bal. 150.000 (a) 300 (b) 800 () 9,000 (e) 500 13,020 Bal. Other Assets 42,500 Deferred Revenue | (0) 6,000 Required: 1. Develop three trial balances of Longhorn Company at December 31, 2012, using the following format: Unadjusted Trial Balance Adjusted Trial Balance Post-closing Trial Balance Account Debit Credit Debit Credit Debit Credit