Martin Towing Company is at the end of its accounting year, December 31, 2014. The following data that must be considered were developed from the company's records and related documents: a. On January 1, 2014, the company purchased a new hauling van at a cash cost of $24,700. Depreciation estimated at $3,500 for the year has not been recorded for 2014. b. During 2014, office supplies amounting to $1,000 were purchased for cash and debited in full to Supplies. At the end of 2013, the count of supplies remaining on hand was $400. The inventory of supplies counted on hand at December 31, 2014, was $450. c. On December 31, 2014, Lanie's Garage completed repairs on one of the company's trucks at a cost of $1,040; the amount is not yet recorded and by agreement will be paid during January 2015. d. On December 31, 2014, property taxes on land owned during 2014 were estimated at $1,440. The taxes have not been recorded, and will be paid in 2015 when billed. e. On December 31, 2014, the company completed a contract for an out-of-state company for $7,900 payable by the customer within 30 days. No cash has been collected, and no journal entry has been made for this transaction. f. On July 1, 2014, a three-year insurance premium on equipment in the amount of $840 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1. g. On October 1, 2014, the company borrowed $6,000 from the local bank on a one- year, 14 percent note payable. The principal plus interest is payable at the end of 12 months. h. The income before any of the adjustments or income taxes was $38,000. The company's federal income tax rate is 40 percent. (Hint: Compute adjusted income based on (a) through (g) to determine income tax expense.) < 1 2 5 7 8 The income before any of the adjustments or income taxes was $38,000. The company's federal income tax rate is 40 percent. Note: Enter debits before credits. Transaction General Journal Debit Credit h Income taxes expense 3,048 Income taxes payable 3,048 Dittman's Variety Store is completing the accounting process for the year just ended, December 31, 2014. The transactions during 2014 have been journalized and posted. The following data with respect to adjusting entries are available: a. Wages earned by employees during December 2014, unpaid and unrecorded at December 31, 2014, amounted to $2,700. The last payroll was December 28; the next payroll will be January 6, 2015. b. Office supplies on hand at January 1, 2014, totaled $450. Office supplies purchased and debited to Office Supplies during the year amounted to $500. The year-end count showed $275 of supplies on hand. c. One-fourth of the basement space is rented to Heald's Specialty Shop for $560 per month, payable monthly. On December 31, 2014, the rent for November and December 2014 had not been collected or recorded. Collection is expected January 10, 2015. d. The store used delivery equipment that cost $60,500; $12,100 was the estimated depreciation for 2014. e. On July 1, 2014, a two-year insurance premium amounting to $2,400 was paid in cash and debited in full to Prepaid Insurance. Coverage began on July 1, 2014. f. The remaining basement of the store is rented for $1,600 per month to another merchant, M. Carlos, Inc. Carlos sells compatible, but not competitive, merchandise. On November 1, 2014, the store collected six months' rent in the amount of $9,600 in advance from Carlos; it was credited in full to Unearned Rent Revenue when collected. g. Dittman's Variety Store operates a repair shop to meet its own needs. The shop also does repairs for M. Carlos. At the end of December 31, 2014, Carlos had not paid $800 for completed repairs. This amount has not yet been recorded as Repair Shop Revenue. Collection is expected during January 2015. Balance Sheet Income Statement Transaction Assets Liabilities Stockholders' Equity Revenues Expenses Net Income (a) (b) (c) (d) (e) (f) (g)