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Complete the 10-column worksheet for the year ended December 31. (For accounts where multiple Adjustments are required, combine all debit entries into one amount and
Complete the 10-column worksheet for the year ended December 31. (For accounts where multiple Adjustments are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Round your final answers to the nearest whole dollar.)
Required Information [The following information applies to the questions disployed below.] On December 1, Year 1, John and Patty Driver formed o corporation colled Susquehanna Equipment Rentals. The new corporation wos able to begin operations immediately by purchasing the assets and taking over the location of Rent-lt, an equipment rental compony that wos going out of business. The newly formed compony uses the following occounts. The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December of its first year of operations, the corporation entered into the following tronsactions. Dec. 1 Issucd to John and Patty Driver 23, eea shares of capital stock in exchange for a total of \$23e,eee cash. Dec. 1 Purchased for $278,490 all of the equipment fornerly owned by Rent-It. Paid $137, eee cash and issucd a 1 -year note payable for $141,4ea. The note, plus all 12 nonths of accrued interest, are due November 39, Year 2. Dec. 1 Paid \$9, 90 to shapiro Realty as three months' advance rent on the rental yard and office formerly occupied by Rent-It. Dec. 4 Purchased office supplies on account fron Modern office Co., \$1, gae. Paynent due in 38 days. (These supplies are expected to last for several months; debit the office Supplies asset account.) Dec. 8 Received $8,100 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fecs.) Dec.12 Paid salaries of $4,600 for the first two wecks in Decenber. Dec.15 Excluding the McNamer advance, equipnent rental fecs earned during the first 15 days of December amounted to $18,90, of which $12,5eg was received in cash. Dec.17 Purchased on account fron Earth Movers, Inc., \$7ee in parts needed to perform basic maintenance on a rental tractor. Paynent is due in 10 days. Dec. 23 Collected $2,70 of the accounts receivable recorded on December 15. Dec.26 Rented a backhoe to Mission Landscaping at a price of $320per day, to be paid when the backhoe is returned. Mission Landscaping expects to kecp the backhoe for about two or three weeks. Dec. 26 Paid biwckly salaries, $4,608. Dec. 27 Paid the account payabie to Earth Movers, Inc., $70. Dec. 28 Declared a dividend of 19 cents per share, payable on January 15, Year 2. Dec.29 Susquchanna Equipment Rentals was naned, along with Mission Landscaping and collier Construction, as a codefendant in a \$22, eae lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by collier construction. After warking hours on Decenber 26 , Davenport had climbed the fence to play on parked construction equipnent. While playing on the backhoe, he fell and broke his arn. The extent of the compony's legal and financial responsibility for this accident, if any, cannot be determined at this tine. (Mote: This event does not require a journal entry at this tine, but may require disclosure in notes accompanying the statements.) Dec.29 Purchased a 12-month public liability insurance policy for \$9,36e. This policy protects the canpany against liability for injuries and property danage caused by its equipnent. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the injuries sustained by Kevin Davenport on Decenber 26. Dec.31 Received a bill fron Universal Utilities for the nonth of Decenber, \$69e. Paynent is due in 39 days. Dec.31 Equipment rental fees earned during the second half of Decenber amounted to $2,3e0, of which $15,9e0 was received in cash. Data for Adjusting Entrles in Year 1 a. The odvonce poyment of rent on December 1 covered o period of three months. b. The onnusl interest rate on the note poysble to Rent-It is 6 percent. c. The rental equipment is being deprecioted by the stroight-line method over a period of eight years. Any solvoge value at the end of its useful life is expected to be negligible and immaterial. d. Office supplies on hand at December 31 are estimated ot $640. e. During December, the company earned $3,800 of the rental fees poid in advance by McNamer Construction Compony on December 8. f. As of December 31, six doys' rent on the bockhoe rented to Mission Londscoping on December 26 hos been earned. g. Salaries earned by employees since the last poyroll date (December 26 ) amounted to $1,500 at month-end. h. It is estimated that the compony is subject to a combined federal and state income tox rate of 40 percent of income before income toxes (total revenue minus all expenses other than income toxes). These toxes will be poyoble in Year 2. Required Information [The following information applies to the questions disployed below.] On December 1, Year 1, John and Patty Driver formed o corporation colled Susquehanna Equipment Rentals. The new corporation wos able to begin operations immediately by purchasing the assets and taking over the location of Rent-lt, an equipment rental compony that wos going out of business. The newly formed compony uses the following occounts. The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December of its first year of operations, the corporation entered into the following tronsactions. Dec. 1 Issucd to John and Patty Driver 23, eea shares of capital stock in exchange for a total of \$23e,eee cash. Dec. 1 Purchased for $278,490 all of the equipment fornerly owned by Rent-It. Paid $137, eee cash and issucd a 1 -year note payable for $141,4ea. The note, plus all 12 nonths of accrued interest, are due November 39, Year 2. Dec. 1 Paid \$9, 90 to shapiro Realty as three months' advance rent on the rental yard and office formerly occupied by Rent-It. Dec. 4 Purchased office supplies on account fron Modern office Co., \$1, gae. Paynent due in 38 days. (These supplies are expected to last for several months; debit the office Supplies asset account.) Dec. 8 Received $8,100 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fecs.) Dec.12 Paid salaries of $4,600 for the first two wecks in Decenber. Dec.15 Excluding the McNamer advance, equipnent rental fecs earned during the first 15 days of December amounted to $18,90, of which $12,5eg was received in cash. Dec.17 Purchased on account fron Earth Movers, Inc., \$7ee in parts needed to perform basic maintenance on a rental tractor. Paynent is due in 10 days. Dec. 23 Collected $2,70 of the accounts receivable recorded on December 15. Dec.26 Rented a backhoe to Mission Landscaping at a price of $320per day, to be paid when the backhoe is returned. Mission Landscaping expects to kecp the backhoe for about two or three weeks. Dec. 26 Paid biwckly salaries, $4,608. Dec. 27 Paid the account payabie to Earth Movers, Inc., $70. Dec. 28 Declared a dividend of 19 cents per share, payable on January 15, Year 2. Dec.29 Susquchanna Equipment Rentals was naned, along with Mission Landscaping and collier Construction, as a codefendant in a \$22, eae lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by collier construction. After warking hours on Decenber 26 , Davenport had climbed the fence to play on parked construction equipnent. While playing on the backhoe, he fell and broke his arn. The extent of the compony's legal and financial responsibility for this accident, if any, cannot be determined at this tine. (Mote: This event does not require a journal entry at this tine, but may require disclosure in notes accompanying the statements.) Dec.29 Purchased a 12-month public liability insurance policy for \$9,36e. This policy protects the canpany against liability for injuries and property danage caused by its equipnent. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the injuries sustained by Kevin Davenport on Decenber 26. Dec.31 Received a bill fron Universal Utilities for the nonth of Decenber, \$69e. Paynent is due in 39 days. Dec.31 Equipment rental fees earned during the second half of Decenber amounted to $2,3e0, of which $15,9e0 was received in cash. Data for Adjusting Entrles in Year 1 a. The odvonce poyment of rent on December 1 covered o period of three months. b. The onnusl interest rate on the note poysble to Rent-It is 6 percent. c. The rental equipment is being deprecioted by the stroight-line method over a period of eight years. Any solvoge value at the end of its useful life is expected to be negligible and immaterial. d. Office supplies on hand at December 31 are estimated ot $640. e. During December, the company earned $3,800 of the rental fees poid in advance by McNamer Construction Compony on December 8. f. As of December 31, six doys' rent on the bockhoe rented to Mission Londscoping on December 26 hos been earned. g. Salaries earned by employees since the last poyroll date (December 26 ) amounted to $1,500 at month-end. h. It is estimated that the compony is subject to a combined federal and state income tox rate of 40 percent of income before income toxes (total revenue minus all expenses other than income toxes). These toxes will be poyoble in Year 2Step by Step Solution
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