Reference no: EM13566980

Lobnitz Service Company's balance sheet as of 01-01-11 is presented below: 01-01-11 Current assets Cash $ 400,000 Accounts receivable $ 300,000 Prepaid office supplies $ 25,000 Non-current assets Property, plant, and equipment - at cost $ 800,000 Accumulated depreciation $ 125,000 TOTAL ASSETS $1,400,000 Current liabilities Accounts payable $ 260,000 Accrued property taxes payable $ 20,000 Unearned service revenue $ 40,000 Non-current liabilities Long-term debt $ 500,000 Stockholders' equity Common stock and additional paid-in-capital $ 200,000 Retained earnings $ 380,000 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,400,000 During the year ended 12-31-11, Lobnitz entered into the following events/transactions:

Paid back 10% of its long-term debt. Received $25,000 for the issuance of an additional 1,000 shares of common stock. Purchased $50,000 of office furniture on a credit basis. Performed $200,000 of services for customers on a cash basis. Performed $800,000 of services for customers on a credit basis. Incurred and paid $175,000 of wage and salary expenses. Paid off 100% of the outstanding accrued property taxes payable. Used up 80% of the prepaid office supplies. Performed the necessary services to earn 75% of its unearned service revenue balance. Collected $900,000 of accounts receivable. Recorded $25,000 of depreciation expense. Incurred and paid $20,000 of interest expense.

Declared and paid $15,000 of dividends on its common stock. Required: Journalize the events/transactions described in items a) through m). In addition, prepare an income statement for the year ended 12-31-11 AND a balance sheet as of 12-31-11. Make sure your balance sheet balances. Assume a 0% income tax rate.