Broadening Your Perspective 4-5 Whitegloves Janitorial Service was started 2 years ago by Jenna Olson. Because business has been exceptionally good, Jenna decided on July 1, 2017, to expand operations by acquiring an additional truck and hiring two more assistants. To finance the expansion, Jenna obtained on July 1,2017, a $25,500, 10% bank loan, payable $8,100 onJuly 1, 2018, and the balance on July 1, 2019. The terms of the loan require the borrower to have $10,000 more current assets than current liabilities at December 31, 2017. If these terms are not met, the bank loan will be refinanced at 15% interest. At December 31, 2017, the accountant for whtegloves Janitorial Service Inc. prepared the balance sheet shown below. Jenna presented the balance sheet to the bank's loan officer on January 2, 2018, confident that the company had met the terms of the loan. The loan officer was not impressed. She said, "We need financial statements audited by a CPA. A CPA was hired and immediately realized that the balance sheet had been prepared from a trial balance and not from an adjusted trial balance. The adjustment data at the balance sheet date consisted of the following. 1. Unbilled janitorial services performed were $3,740 2. Janitorial supplies on hand were $2,370. 3. Prepaid insurance was a 3-year policy dated January 1, 2017 4. December expenses incurred but unpaid at December 31, $420. 5. Interest on the bank loan was not recorded 6. The amounts for property, plant, and equipment presented in the balance sheet were reported net of accumulated depreciation (cost less accumulated depreciation). These amounts were $3,800 for cleaning equipment and $4,800 for delivery trucks as of January 1, 2017. Depreciation for 2017 was $1,990 for cleaning equipment and $5,000 for delivery trucks. WHITEGLOVES JANITORIAL SERVICE Balance Sheet December 31, 2017 WHITEGLOVES JANITORIAL SERVICE Balance Sheet December 31, 2017 Liabilities and Owner's Equity Assets Current liabilities Current assets $8,100 2,330 10,430 Cash Accounts receivable Supplies Prepaid insurance $5,300 8,300 5,500 Notes payable Accounts payable Total current liabilities 4,800 Long-term liability 7,400 Total current assets Notes payable 23,900 Property, plant, and equipment Total liabilities 27,830 Equipment (net) Delivery trucks (net) 20,400 Owner's equity 31,400 Oners capital 51,800 $75,700 47,870 Total property, plant, and equipment Total liabilities and owners equity $75,700 Total assets Prepare a correct balance sheet. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Equipment and Delivery Trucks.) WHITEGLOVES JANITORIAL SERVICE Balance Sheet Assets WHITEGLOVES JANITORIAL SERVICE Balance Sheet Assets Current Assets Cash Accounts Receivable Supplies Prepaid Insurance Property, Plant and Equipment Total Property, Plant and Equipment Delivery Trucks Less ,Accumulated Depreciation-Delivery Trucks Delivery Trucks Add Were the terms of the bank loan met