McGuire Corporation began operations in 2018. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2018, the bookkeeper used a check register to record all cash receipts and cash disbursements. No otherjournals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Sale of common stock $ 30,000 Collections from customers 250,000 Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2019 20,000 Total cash receipts $300,000 Cash disbursements: Purchase of merchandise $160,000 Payment of salaries and wages 55,000 Purchase of office equipment 18,000 Payment of rent on building 7,000 Miscellaneous expenses 8,000 Total cash disbursements $248,000 You are called in to prepare financial statements at December 31, 2018. The following additional information was provided to you: Customers owed the company $12,000 at year-end. At year-end, $24,500 was still due to suppliers of merchandise purchased on credit. At year-end, merchandise inventory costing $38,000 still remained on hand. Salaries and wages owed to employees at year-end amounted to $3,000. On December 1, $900 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. The ofce equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2018. Straightline depreciation is used. .U'lPl-'JNH .0' _ _ - Salaries and wages expense Rent expense Depreciation expense Miscellaneous expense Total operating expenses Operating income Other expenses Interest expense MCGUIRE CORPORATION Balance Sheet At December 31, 2018 Assets Current assets Cash Accounts receivable Prepaid rent Inventory Total current assets 0 Office equipment Accumulated depreciation Total assets 0 Liabilities and Shareholders' Equity Current liabilities Accounts payable Salaries and wages payable Note payable Interest payable Total current liabilities 0 Shareholders' equity Common stock Retained earnings Total shareholders' equity 0 Total liabilities and shareholders' equity EA 0