aw-Hill Conne NWFSC BlackboardBs The corporation performs adjusting entries monthly Closing entries are performed annually on December 31 During December, the corporation entered into the following transactions. Dec. 1 Issued to John and Patty Driver 24,000 shares of capital stock in exchange for a total of $240,000 cash, Dec. 1 Purchased for $288,000 all of the equipment formerly oned by Rent-it. Paid $134,000 cash and issued a iyer 0ec. 1 Paid s11,100 to Shapiro Realty as three months' advance rent on the rental yard and office formerly occupled by Dec. 4 Purchased office supplies on account froe Hodern Office Co..$1,800. Payment due in 30 days. (These supplies are Dec. 8 Received 58, 500 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Dec. 12 Paid salaries for the first two weeks in December, $4,90. note payable for $154,000. The note, plus all 12 months of accrued interest, are due November 30, Year 2. expected to last for several months; debit the office Supplies asset account.) tsling the ncNane advance, equipment rental fees earned during the first 1s days of December amounted to $19,000, of which $12,600 was received fn cash Dec.17 Purchased on account from Earth overs, Inc., Sde In parts needed t repair a rental tractor. (Debit an e-pense account.) Payment is due in 10 days Dec.23 Collected $2,200 of the accounts receivable recarded on December 15. Dec.26 Rented a backhoe to ission Landscaping at a prike of $2se per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks Dec.26 Paid biweekly salaries, $4,900 Dec. 27 Pald the account payable to Earth Movers, Inc., $78e. Dec.28 Declared a dividend of 18 cents per share, payable on January 15, Year 2 Dec. 29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co- defendant in a $27,600 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier Construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. uhile playing on the backhoe, he fell and broke his are. The extent of the coepany's legal and financial responsibility for this accident, if any, cannot be determined at this time. (Note: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements. Dec. 29 Purchased a 12-month public liability insurance policy for $8,520. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the Injurles sustained by Kevin Davenport on December 26 Dec. 31 Recelved a bill from Universal utilities for the month of December, $640. Payment is due in 30 days Dec.31 Equipaentrental fees earned during the second half of December mounted t?Se,a, of which sease was , received in cash. Data for Adjusting Entries o. The advance payment of rent on December 1 covered a period of three months b. The annual interest rate on the note payable to Rent-It is 6 percent c. The rental equipment is being depreciated by the straight-line method over a period of eight years. d. Office supplies on hand at December 31 are estimated at $670 e. During December, the company earned $3.900 of the rental fees paid in advance by McNamer Construction Company f. As of December 31, six days' rent on the backhoe rented to Mission Landscaping on December 26 has been earned g. Salaries earned by employees since the last payroll date (December 26) amounted to $1.200 at month-end s estimated that the company is subject to a combined federal and state income tax rate of 40 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2 21 22 23 aw-Hill Conne NWFSC BlackboardBs The corporation performs adjusting entries monthly Closing entries are performed annually on December 31 During December, the corporation entered into the following transactions. Dec. 1 Issued to John and Patty Driver 24,000 shares of capital stock in exchange for a total of $240,000 cash, Dec. 1 Purchased for $288,000 all of the equipment formerly oned by Rent-it. Paid $134,000 cash and issued a iyer 0ec. 1 Paid s11,100 to Shapiro Realty as three months' advance rent on the rental yard and office formerly occupled by Dec. 4 Purchased office supplies on account froe Hodern Office Co..$1,800. Payment due in 30 days. (These supplies are Dec. 8 Received 58, 500 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Dec. 12 Paid salaries for the first two weeks in December, $4,90. note payable for $154,000. The note, plus all 12 months of accrued interest, are due November 30, Year 2. expected to last for several months; debit the office Supplies asset account.) tsling the ncNane advance, equipment rental fees earned during the first 1s days of December amounted to $19,000, of which $12,600 was received fn cash Dec.17 Purchased on account from Earth overs, Inc., Sde In parts needed t repair a rental tractor. (Debit an e-pense account.) Payment is due in 10 days Dec.23 Collected $2,200 of the accounts receivable recarded on December 15. Dec.26 Rented a backhoe to ission Landscaping at a prike of $2se per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks Dec.26 Paid biweekly salaries, $4,900 Dec. 27 Pald the account payable to Earth Movers, Inc., $78e. Dec.28 Declared a dividend of 18 cents per share, payable on January 15, Year 2 Dec. 29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co- defendant in a $27,600 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier Construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. uhile playing on the backhoe, he fell and broke his are. The extent of the coepany's legal and financial responsibility for this accident, if any, cannot be determined at this time. (Note: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements. Dec. 29 Purchased a 12-month public liability insurance policy for $8,520. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the Injurles sustained by Kevin Davenport on December 26 Dec. 31 Recelved a bill from Universal utilities for the month of December, $640. Payment is due in 30 days Dec.31 Equipaentrental fees earned during the second half of December mounted t?Se,a, of which sease was , received in cash. Data for Adjusting Entries o. The advance payment of rent on December 1 covered a period of three months b. The annual interest rate on the note payable to Rent-It is 6 percent c. The rental equipment is being depreciated by the straight-line method over a period of eight years. d. Office supplies on hand at December 31 are estimated at $670 e. During December, the company earned $3.900 of the rental fees paid in advance by McNamer Construction Company f. As of December 31, six days' rent on the backhoe rented to Mission Landscaping on December 26 has been earned g. Salaries earned by employees since the last payroll date (December 26) amounted to $1.200 at month-end s estimated that the company is subject to a combined federal and state income tax rate of 40 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2 21 22 23