Near the end of its first year of operations, December 31, 2021, Swifty Designs Ltd approached the local bank for a $21,800 loan and was asked to submit financial statements prepared on an accrual basis. Although the company kept no formal accounting records, it did maintain a record of cash receipts and payments. The following information is available for the year ended December 31: Issue of common shares Fees earned Equipment Supplies Rent Insurance Income tax Advertising Salaries Dividends declared Cash Receipts Cash Payments $ 20,400 162,600 $ 32,100 9,300 18,730 3,840 5.900 7.200 56,800 9,100 $183,000 $142.970 1. 2. Additional information: Fees from design work earned but not yet collected amounted to $2,490. The equipment was purchased at the beginning of January and has an estimated six-year useful life. The company uses straight-line depreciation 3. Supplies on hand on December 31 were $1.260. Rent payments included a $1.400 per month rental fee and a $1,930 deposit that is refundable at the end of the two-year lease. (Hint: Use the Prepaid Rent account for the refundable deposit.) The insurance was purchased on February 1 for a one-year period expiring January 31, 2022. Salaries earned for the last four days in December and to be paid in January 2022 amounted to $3,310 At year end, it was determined that an additional $6,300 is owed for income tax. 4. 5. 6. 7. Near the end of its first year of operations, December 31, 2021, Swifty Designs Ltd approached the local bank for a $21,800 loan and was asked to submit financial statements prepared on an accrual basis. Although the company kept no formal accounting records, it did maintain a record of cash receipts and payments. The following information is available for the year ended December 31: Issue of common shares Fees earned Equipment Supplies Rent Insurance Income tax Advertising Salaries Dividends declared Cash Receipts Cash Payments $ 20,400 162,600 $32.100 9.300 18,730 3,840 5,900 7,200 56,800 9.100 $183,000 $142.970 1. 2. Additional information: Fees from design work earned but not yet collected amounted to $2,490. The equipment was purchased at the beginning of January and has an estimated six-year useful life. The company uses straight-line depreciation 3. Supplies on hand on December 31 were $1.260. Rent payments included a $1,400 per month rental fee and a $1,930 deposit that is refundable at the end of the two-year lease. (Hint: Use the Prepaid Rent account for the refundable deposit.) The insurance was purchased on February 1 for a one-year period expiring January 31, 2022. 6. Salaries earned for the last four days in December and to be paid in January 2022 amounted to $3,310 7. At year end, it was determined that an additional $6,300 is owed for income tax. 5