Question 1 (8 marks)

The following incomplete financial statements are for JTC Enterprises Inc.:

Revenues .................................................................................................................... $1,250,063

Salaries expense .........................................................................................................	680,000
Administrative expenses ............................................................................................	250,438
Interest expense ..........................................................................................................	45,000
Rent expense ..............................................................................................................	18,000
Total expenses ............................................................................................................	(a)
Net income .................................................................................................................	(b)
Total shareholders' equity, beginning of year ............................................................	$811,000
Common shares, beginning of year ...........................................................................	(c)
Issue of shares ............................................................................................................	250,438
Common shares, end of year ......................................................................................	475,000
Retained earnings, beginning of year .........................................................................	(d)
Dividends declared .....................................................................................................	58,000
Retained earnings, end of year ...................................................................................	785,063
Total shareholders' equity, end of year ......................................................................	(e)
Total assets .................................................................................................................	(f)

Total liabilities ........................................................................................................... 1,785,000

Total liabilities and shareholders' equity ................................................................... (g)

Instructions

Complete the missing data in these financial statements:

(a) Total expenses
(b) Net income
(c) Common shares, beginning of year
(d) Retained earnings, beginning of year
(e) Total shareholders' equity, end of year
(f) Total assets
(g) Total liabilities and shareholders' equity

Question 2 (6 marks)

Provide an explanation for each of the following:

1. Why is an increase in an expense shown as a negative number in the expanded accounting equation?

1. Why is cash received before services are performed not regarded as revenue?

1. Why are dividends declared not recorded as an expense?