of 3 This is a comprehensive accounting cycle problem. Please read the following carefully and we On December 1, 2019. Jhand Pally D e formed a corporation called immediately by purchasing the stand taking over the location of Renta equipment rental company was going out of business. During December 2019, the corporation entered into the following transactions Dessed to hand Putty 20.000 shares of capital sock in charge for 1 Purchased for 240.000 all of the equipment formerly owned by Rent-it Paid $140.000 cash and one year role paylor $100.000 Then , plus Dec. 1512.000 Sha h adance on the yard and office formerly copied by Rent.it Dec. 4 Purchased lice supplies on account from Moom Office Co. $1,000 Payment due these d a Get the Orice Supplies account De Received 58.000 cash a dvance payment on equipment from Dec. 12 Paid salaries for the first two weeks in December $5.200 Dec. 15 Excluding the Morner dance equipment fees armed during the rut 15 days of December amounted to $18.000, of which $12.000 was in Dec. 17 Purchased on account from Earth Moers, Inc., in parts needed to repair Dec. 23 Collected $2.000 of the accounts receiv e d on December 15 De 26 Reed a bachet M on and a price of $250 per day to be paid when the bacche is returned Mission Landscaping expects to keep the backhoe Dec. 26 Pad e s $5.200 Des. 27 Paid the account payable to Earth Movers, Inc. 5600 Des 28 Deceda dividend of corpor e on Jawy 15, 2020 Dec. 29 Purchased a 1-month publicability insurance policy for $900. This policy protects the company againstability for injuries and property damage caused by equipment. However, the policy infector y 1.2020, and ordene Coverage w e d by Kevin Davenport on December 26 Page 2013 Dec. 31 Received from Universal for the month of December $700 Des 31 Equipment researed during the second half of December amounted to $20,000, of which $15.000 din Data for ting Entries on December 31.2018 aj The advance payment of rent on December covered a period of the most The annu s e on the role playable to Rent is percent c) The r u ment is being depreciated by the s hine mehed over a period of eight years d) Office supplies on hand at December 31 wre estimated 5600 During December, the company cared of the paid in advance As of December 31. sident on the corres Mission Landscaping on December 28 has been earned Salaries cured by employees ince the last payroll date December 26) You are required to perform the following steps of the mounting odle for the mon ) 1. Jonathansactions to December 1 December 31. 2. Prepare the necessary adjusting entries for to (14 Marts 3. Prepare a tr ance 31 December 2015 (12 ) Prepare an income statement and balance sheet according to the tr a ce 5. During December, this company's cash balance has talento 5.200.000 $85.000. Doespearheaded for even the near future? Explain your reasoning (M ) & Would it be the towy D omahe accounting records for the Organon? Marka of 3 This is a comprehensive accounting cycle problem. Please read the following carefully and answer all questions: On December 1, 2019, John and Patty Driver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and taking over the location of Rent-tan equipment rental company that was going out of business. During December 2019 the corporation entered into the following transactions Dec. 1 Issued to John and Patty Driver 20,000 shares of capital stock in exchange for a total of $200,000 cash Dec. 1 Purchased for $240.000 all of the equipment formerly owned by Rent-it. Paid $140,000 cash and issued a one-year note payable for $100,000. The note, plus all 12-months of accrued interest are due November 30, 2020 Dec. 1 Paid $12,000 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 from Modern Office Co. $1,000 Payment due in 30 days. These supplies are expected to last for several months debit the Office Supplies asset account.) Dec. 8 Received $8,000 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Uneamed Rental Fees.) Dec. 12 Paid salaries for the first two weeks in December, $5.200 Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,000, of which $12,000 was received in cash Dec. 17 Purchased on account from Earth Movers, Inc., $600 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. Dec. 23 Collected $2,000 of the accounts receivable recorded on December 15, Dec. 26 Rented a backhoe to Mission Landscaping at a price of $250 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, $5,200. Dec. 27 Paid the account payable to Earth Movers, Inc., 5600 Dec. 28 Declared a dividend of 10 cents per share, payable on January 15, 2020 Dec. 29 Purchased a 12-month public-liability insurance policy for $9.600. 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, 2020, and affords no coverage for the injuries sustained by Kevin Davenport on December 26 Page 2 of 3 Dec. 31 Received a bil from Universal Usilities for the month of December, 5700 Payment is due in 30 days. Dec. 31 Equipment rental fees earned during the second half of December amounted to $20,000, of which $15,600 was received in cash. Data for Adjusting Entries on December 31, 2019: (a) 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 $600. (e) During December, the company earned $3,700 of the rental fees paid in advance by McNamer Construction Company on December 8. () As of December 31, six days' rent on the backhoe rented to Mission Landscaping on December 26 has been earned. (9) Salaries earned by employees since the last payroll date (December 26) amounted to $1,400 at month-end. Tomas T . 3. Prepare a trial balance as at 31 December 2019. (12 Marks) 4. Prepare an income statement and balance sheet according to the trial balance. (24 Marks) 5. During December, this company's cash balance has fallen from $200,000 to $65,000. Does it appear headed for insolvency in the near future? Explain yo reasoning. (10 Marks) 6. Would it be ethical for Patty Driver to maintain the accounting records for this company, or must they be maintained by someone who is independent of the organization? (7 Marks) of 3 This is a comprehensive accounting cycle problem. Please read the following carefully and we On December 1, 2019. Jhand Pally D e formed a corporation called immediately by purchasing the stand taking over the location of Renta equipment rental company was going out of business. During December 2019, the corporation entered into the following transactions Dessed to hand Putty 20.000 shares of capital sock in charge for 1 Purchased for 240.000 all of the equipment formerly owned by Rent-it Paid $140.000 cash and one year role paylor $100.000 Then , plus Dec. 1512.000 Sha h adance on the yard and office formerly copied by Rent.it Dec. 4 Purchased lice supplies on account from Moom Office Co. $1,000 Payment due these d a Get the Orice Supplies account De Received 58.000 cash a dvance payment on equipment from Dec. 12 Paid salaries for the first two weeks in December $5.200 Dec. 15 Excluding the Morner dance equipment fees armed during the rut 15 days of December amounted to $18.000, of which $12.000 was in Dec. 17 Purchased on account from Earth Moers, Inc., in parts needed to repair Dec. 23 Collected $2.000 of the accounts receiv e d on December 15 De 26 Reed a bachet M on and a price of $250 per day to be paid when the bacche is returned Mission Landscaping expects to keep the backhoe Dec. 26 Pad e s $5.200 Des. 27 Paid the account payable to Earth Movers, Inc. 5600 Des 28 Deceda dividend of corpor e on Jawy 15, 2020 Dec. 29 Purchased a 1-month publicability insurance policy for $900. This policy protects the company againstability for injuries and property damage caused by equipment. However, the policy infector y 1.2020, and ordene Coverage w e d by Kevin Davenport on December 26 Page 2013 Dec. 31 Received from Universal for the month of December $700 Des 31 Equipment researed during the second half of December amounted to $20,000, of which $15.000 din Data for ting Entries on December 31.2018 aj The advance payment of rent on December covered a period of the most The annu s e on the role playable to Rent is percent c) The r u ment is being depreciated by the s hine mehed over a period of eight years d) Office supplies on hand at December 31 wre estimated 5600 During December, the company cared of the paid in advance As of December 31. sident on the corres Mission Landscaping on December 28 has been earned Salaries cured by employees ince the last payroll date December 26) You are required to perform the following steps of the mounting odle for the mon ) 1. Jonathansactions to December 1 December 31. 2. Prepare the necessary adjusting entries for to (14 Marts 3. Prepare a tr ance 31 December 2015 (12 ) Prepare an income statement and balance sheet according to the tr a ce 5. During December, this company's cash balance has talento 5.200.000 $85.000. Doespearheaded for even the near future? Explain your reasoning (M ) & Would it be the towy D omahe accounting records for the Organon? Marka of 3 This is a comprehensive accounting cycle problem. Please read the following carefully and answer all questions: On December 1, 2019, John and Patty Driver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and taking over the location of Rent-tan equipment rental company that was going out of business. During December 2019 the corporation entered into the following transactions Dec. 1 Issued to John and Patty Driver 20,000 shares of capital stock in exchange for a total of $200,000 cash Dec. 1 Purchased for $240.000 all of the equipment formerly owned by Rent-it. Paid $140,000 cash and issued a one-year note payable for $100,000. The note, plus all 12-months of accrued interest are due November 30, 2020 Dec. 1 Paid $12,000 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 from Modern Office Co. $1,000 Payment due in 30 days. These supplies are expected to last for several months debit the Office Supplies asset account.) Dec. 8 Received $8,000 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Uneamed Rental Fees.) Dec. 12 Paid salaries for the first two weeks in December, $5.200 Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,000, of which $12,000 was received in cash Dec. 17 Purchased on account from Earth Movers, Inc., $600 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. Dec. 23 Collected $2,000 of the accounts receivable recorded on December 15, Dec. 26 Rented a backhoe to Mission Landscaping at a price of $250 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, $5,200. Dec. 27 Paid the account payable to Earth Movers, Inc., 5600 Dec. 28 Declared a dividend of 10 cents per share, payable on January 15, 2020 Dec. 29 Purchased a 12-month public-liability insurance policy for $9.600. 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, 2020, and affords no coverage for the injuries sustained by Kevin Davenport on December 26 Page 2 of 3 Dec. 31 Received a bil from Universal Usilities for the month of December, 5700 Payment is due in 30 days. Dec. 31 Equipment rental fees earned during the second half of December amounted to $20,000, of which $15,600 was received in cash. Data for Adjusting Entries on December 31, 2019: (a) 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 $600. (e) During December, the company earned $3,700 of the rental fees paid in advance by McNamer Construction Company on December 8. () As of December 31, six days' rent on the backhoe rented to Mission Landscaping on December 26 has been earned. (9) Salaries earned by employees since the last payroll date (December 26) amounted to $1,400 at month-end. Tomas T . 3. Prepare a trial balance as at 31 December 2019. (12 Marks) 4. Prepare an income statement and balance sheet according to the trial balance. (24 Marks) 5. During December, this company's cash balance has fallen from $200,000 to $65,000. Does it appear headed for insolvency in the near future? Explain yo reasoning. (10 Marks) 6. Would it be ethical for Patty Driver to maintain the accounting records for this company, or must they be maintained by someone who is independent of the organization? (7 Marks)