A COMPREHENSIVE ACCOUNTING CYCLE PROBLEM Cash Accounts frecelvable Prepald Ment Unexpled imburance Orfice Supplies Aental Equipment Accumulated Depreciation: Rental Equipment Notes Payable Accounts Payable Interest Pryable Sakaries Payable Dividends Payable Unearned Plental Fees Income Fases Pryable Capitat Ssock. Retained Eamings Dividends Income Sumnary Alental Fees Earned Salaries Expense Maintenance Expense Utisties Expense Pent Expense Office Supples Expense Depreclation Expense interest Expense Income Taves Expense followisg transactions. Dec. 1 isseed so John and Patty Detiver 20,000 shares of capial stock in ewchange for s total of 5240,000 cash. Dec. 1 Paid $14,400 so Shapire Reality as three months' advence rent on the rental yard and office formenly occupied by Rent il. Dec. 8 Pleceived $9,600 cash as advance parment on equipment rents from Mclvemer Construcsios Conpany. (Ciedat Uneained Remal Fees) Dec. 12 Paid salaries of $6,240 for the finst two weeks in December Dec. 17 Purchased on accosum trom Earth Movers, inc, 3720 in parts needed to pedom bavic maintenance on a remal tractor, Payment is due in to days. Dec. 23 Cotected $2.400 of the accouns receivable recorided on December 15. Dec. 26 Paid biweekly salaries, 56.240. Dec, 27 Paid the accoum payabie to Earth Movern, Ine, $720 Dec. 28 Declared a dividend of 12 cents per share, payable en January 15 , Wear 2. Dec. 31 Recelved a bir trom Universal unises for the manth of December, $840. Payment is due in 30 days. Dec. 31 Equipment rentel fees earned during the secorid half of Decenbes amoumed to $24,000, of which $18,720 was received in cash. Date for Adjusting Entries in Year 1 b. The ansual inbersat rate an the note pupable to Reat-ft is of percrat. d. Otice supplies oa hand as Decentaber 31 are estimated an 5720. There taus will te payable in Vear 2. Instructions 2. Perforat the following iteps of the accoventiris cycle for the moatk of Decencher, Year 1 2. Post the December irasactiens to the apsoopriate leder accosuts. 3. Prepare the unadjanted trial balanee columns of a 10-columin workihice far the yeat cnded Decterber 31 . 4. Prepure the necessary sodusting eatries on Deconker 31. 5. Post the December adjusting enitries to the aswopriate ledger accousts. 6. Complete the 10column worksheet for the year eaded Deceeriber H. b. Prepare as income statement and statement of retained earnings for the year eded Devenber 31, and a balase sheet as of December 31 . Year 1 d. Prepare closing entries and post thent to hdqer accounts 4. Prepare an aftescloning trial balance un of December H. Year 1 . 2. Would it be ethical for Paty Driver to maintain the accounting records for this conpum, of must they be maintained by sumeone who is independent of the crusaization
