Whitegloves Janitorial Service Inc. was started 2 years ago by Nancy Kohl. Because business has been exceptionally good, Nancy decided on July 1, 2008, to expand operations by acquiring an additional truck and hiring two more assistants. To finance the expansion, Nancy obtained on July 1, 2008, a $25,000, 10% bank loan, payable $10,000 on July 1, 2009, and the balance on July 1, 2010. The terms of the loan require the borrower to have $10,000 more current assets than current liabilities at December 31, 2008. If these terms are not met, the bank loan will be refinanced at 15% interest. At December 31, 2008, the accountant forWhitegloves Janitorial Service Inc. prepared the balance sheet shown on page 192. Nancy presented the balance sheet to the banks loan officer on January 2, 2009, 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) Earned but unbilled janitorial services were $3,700. (2) Janitorial supplies on hand were $2,500. (3) Prepaid insurance was a 3-year policy dated January 1, 2008. (4) December expenses incurred but unpaid at December 31, $500. (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 $4,000 for cleaning equipment and $5,000 for delivery trucks as of January 1, 2008. Depreciation for 2008 was $2,000 for cleaning equipment and $5,000 for delivery trucks. 192 Chapter 4 Completing the Accounting Cycle WHITEGLOVES JANITORIAL SERVICE INC. Balance Sheet December 31, 2008 Assets Current assets Cash $ 6,500 Accounts receivable 9,000 Janitorial supplies 5,200 Prepaid insurance 4,800 Total current assets 25,500 Property, plant, and equipment Cleaning equipment (net) 22,000 Delivery trucks (net) 34,000 Total property, plant, and equipment 56,000 Total assets $81,500 _______________________________________________________ Liabilities and Owners Equity Current liabilities Notes payable $10,000 Accounts payable 2,500 Total current liabilities 12,500 Long-term liability Notes payable 15,000 Total liabilities 27,500 Stockholders equity Common stock 40,000 Retained earnings 14,000 Total stockholders equity 54,000 Total liabilities and stockholders equity $81,500 With new adjustments what balance do you come with