On 1 December 2013, 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-It, an equipment rental company that was going out of business. The newly formed company uses the following accounts: Cash Accounts Receivable Prepaid Rent Unexpired Insurance Office Supplies Rental Equipment Accumulated Depreciation: Rental Equipment Notes Payable Accounts Payable Interest Payable Salaries Payable Dividends Payable Unearned Rental Fees Income Taxes Payable Share Capital Retained Earnings Dividends Income Summary Rental Fees Earned Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense Interest Expense Income Taxes Expense The corporation performs adjusting entries monthly. Closing entries are performed annually on 31 December. During December, the corporation entered into the following transactions: The corporation performs adjusting entries monthly. Closing entries are performed annually on 31 December. During December, the corporation entered into the following transactions: Dec. 1 Issued to John and Patty Driver 24,000 new shares in exchange for a total of $240,000 cash. Dec. 1 Purchased for $278,400 all of the equipment formerly owned by Rent-It. Paid $139,000 cash and issued a one-year note payable for $139,400. The notes, plus all 12-months of accrued interest, are due 30 November 2013. Dec. 1 Paid $10,500 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 $8,300 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.) Dec. 12 Paid salaries for the first two weeks in December, $4,400. Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,500, of which $12,600 was received in cash. Dec. 17 Purchased on account from Earth Movers Limited, $900 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. Dec. 23 Collected $2,500 of the accounts receivable recorded on 15 December. Dec. 26 Rented a backhoe to Mission Landscaping at a price of $300 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, $4,400. Dec. 27 Paid the account payable to Earth Movers Limited, $900. Dec. 28 Declared a dividend of 10 cents per share, payable on 15 January 2014. Dec. 29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $29,000 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 26 December, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he fell and broke his arm. The extent of the company'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 $9,000. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on 1 January 2014, and affords no coverage for the injuries sustained by Kevin Davenport on 26 December. Dec. 31 Received a bill from Universal Utilities for the month of December, $650. Payment is due in 30 days. Dec. 31 Equipment rental fees earned during the second half of December amounted to $20,000, of which $16,200 was received in cash. Data for Adjusting Entries a. The advance payment of rent on 1 December 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 31 December are estimated at $610. e. During December, the company earned $4,300 of the rental fees paid in advance by McNamer Construction Co.on 8 December. f. As of 31 December, six days' rent on the backhoe rented to Mission Landscaping on 26 December has been earned. g. Salaries earned by employees since the last payroll date (26 December) amounted to $1,200 at month- end. h. It is estimated that the company is subject to an income tax rate of 40 percent of profit before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2014. Journalize the December transactions. Do not record adjusting entries at this point. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) General Journal Credit Date Dec. 1 Debit 240000 Cash Share Capital 240000 1 278400 Rental equipment Cash Notes payable >> 139,000 139,400 1 10500 Prepaid rent Cash 10500 4 1000 Office supplies Accounts payable 1000 8 8300 Cash Unearned rental fees 8300 12 4400 Salaries expense Cash 4400 15 Accounts receivable Cash Rental fees earned 5,900 12,600 18500 17 900 Maintenance expense Accounts payable 900 23 2500 Cash Accounts receivable 2500 26 1800 Accounts receivable (Click to select) 1800 26 4400 Salaries expense Cash 4400 27 900 Accounts payable Cash 900 28 2900 Dividends Dividends payable 2900 29 (Click to select) (Click to select) 29 9000 Unexpired insurance Cash 9000 31 Utilities expense Accounts payable 31 (Click to select) (Click to select) (Click to select) Prepare the necessary adjusting entries for December. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) Debit Credit Date Dec. 31 General Journal (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) Prepare closing entries and post to ledger accounts. (Do not round intermediate calculations. Omit the "$" sign in your response.) General Journal Debit Credit Date Dec. 31 Rent fees earned Income summary 31 Income summary Salaries expense Maintenance expense Utilities expense |(Click to select) (Click to select) (Click to select) (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 2. value: 25.00 points Post the entries into the following ledger accounts. (Record the transactions in the given order. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) GENERAL LEDGER Cash Credit Debit Balance Date Dec. 1 1 1 8 12 15 23 26 27 29 31 Accounts Receivable Credit Debit Balance Date Dec. 15 23 31 31 Prepaid Rent Credit Debit Balance Date Dec. 1 31 Unexpired Insurance Credit Debit Balance Date Dec. 29 Office Supplies Credit Debit Balance Date Dec. 4 31 Rental Equipment Credit Debit Balance Date Dec. 1 Accumulated Depreciation: Rental Equipment Debit Credit Balance Date Dec. 31 Notes Payable Credit Debit Balance Date Dec. 1 Accounts Payable Credit Debit Balance Date Dec. 4 17 27 31 Interest Payable Credit Debit Balance Date Dec. 31 Salaries Payable Credit Debit Balance Date Dec. 31 Dividends Payable Credit Debit Balance Date Dec. 28 Unearned Rental Fees Credit Debit Balance Date 8 Dec. 31 Income Taxes Payable Credit Debit Balance Date Dec. 31 Share Capital Credit Debit Balance Date Dec. 1 Retained Earnings Credit Debit Balance Date Dec. 31 31 Dividends Credit Debit Balance Date Dec. 28 31 Income Summary Credit Debit Balance Date Dec. 31 m 31 31 Rental Fees Earned Credit Debit Balance Date Dec. 15 31 31 31 31 Salaries Expense Credit Debit Balance Date Dec. 12 26 31 III 31 Maintenance Expense Credit Debit Balance Date Dec. 17 30 Utilities Expense Credit Date Debit Balance Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Office Supplies Expense Credit Debit Balance Date Dec. 31 31 Depreciation Expense Credit Date Debit Balance Dec. 31 31 Interest Expense Credit Debit Balance Date Dec. 31 31 Depreciation Expense Credit Debit Balance Date Dec. 31 31 Interest Expense Credit Debit Balance Date Dec. 31 31 Income Taxes Expense Credit Debit Balance Date Dec. 31 31 3 . value: 10.00 points Prepare an income statement for the year ended December 31. (Input all amounts as positive values. Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2013 V Revenue: (Click to select) Expenses (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) V V $ (Click to select) (Click to select) (Click to select) $ 4. value: 5.00 points Prepare a statement of changes in equity for the year ended December 31. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Statement of Changes in Equity For the Year Ended December 31, 2013 $ Retained earnings, December 1, 2013 (Click to select) Subtotal (Click to select) IND Retained earnings, December 31, 2013 $ Prepare a statement of financial position (in report form) as at December 31. (Input all amounts as positive values. Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Statement of financial position December 31, 2013 $ V Assets (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) V A A Total Assets $ Liabilities & Equity Liabilities: (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) Total Liabilities $ Shareholders' equity: (Click to select) (Click to select) $ Total Shareholders' Equity $ HII Total Liabilities and Shareholders' Equity 6. value: 5.00 points Prepare an after-closing trial balance as of December 31. (The items in the Trial Balance should be grouped as follows: Assets in order of their liquidity), Liabilities in order of their liquidity) and Equity. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS After-Closing Trial Balance December 31, 2013 Debit $ Credit III V (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) V Totals On 1 December 2013, 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-It, an equipment rental company that was going out of business. The newly formed company uses the following accounts: Cash Accounts Receivable Prepaid Rent Unexpired Insurance Office Supplies Rental Equipment Accumulated Depreciation: Rental Equipment Notes Payable Accounts Payable Interest Payable Salaries Payable Dividends Payable Unearned Rental Fees Income Taxes Payable Share Capital Retained Earnings Dividends Income Summary Rental Fees Earned Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense Interest Expense Income Taxes Expense The corporation performs adjusting entries monthly. Closing entries are performed annually on 31 December. During December, the corporation entered into the following transactions: The corporation performs adjusting entries monthly. Closing entries are performed annually on 31 December. During December, the corporation entered into the following transactions: Dec. 1 Issued to John and Patty Driver 24,000 new shares in exchange for a total of $240,000 cash. Dec. 1 Purchased for $278,400 all of the equipment formerly owned by Rent-It. Paid $139,000 cash and issued a one-year note payable for $139,400. The notes, plus all 12-months of accrued interest, are due 30 November 2013. Dec. 1 Paid $10,500 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 $8,300 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.) Dec. 12 Paid salaries for the first two weeks in December, $4,400. Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,500, of which $12,600 was received in cash. Dec. 17 Purchased on account from Earth Movers Limited, $900 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. Dec. 23 Collected $2,500 of the accounts receivable recorded on 15 December. Dec. 26 Rented a backhoe to Mission Landscaping at a price of $300 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, $4,400. Dec. 27 Paid the account payable to Earth Movers Limited, $900. Dec. 28 Declared a dividend of 10 cents per share, payable on 15 January 2014. Dec. 29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $29,000 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 26 December, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he fell and broke his arm. The extent of the company'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 $9,000. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on 1 January 2014, and affords no coverage for the injuries sustained by Kevin Davenport on 26 December. Dec. 31 Received a bill from Universal Utilities for the month of December, $650. Payment is due in 30 days. Dec. 31 Equipment rental fees earned during the second half of December amounted to $20,000, of which $16,200 was received in cash. Data for Adjusting Entries a. The advance payment of rent on 1 December 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 31 December are estimated at $610. e. During December, the company earned $4,300 of the rental fees paid in advance by McNamer Construction Co.on 8 December. f. As of 31 December, six days' rent on the backhoe rented to Mission Landscaping on 26 December has been earned. g. Salaries earned by employees since the last payroll date (26 December) amounted to $1,200 at month- end. h. It is estimated that the company is subject to an income tax rate of 40 percent of profit before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2014. Journalize the December transactions. Do not record adjusting entries at this point. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) General Journal Credit Date Dec. 1 Debit 240000 Cash Share Capital 240000 1 278400 Rental equipment Cash Notes payable >> 139,000 139,400 1 10500 Prepaid rent Cash 10500 4 1000 Office supplies Accounts payable 1000 8 8300 Cash Unearned rental fees 8300 12 4400 Salaries expense Cash 4400 15 Accounts receivable Cash Rental fees earned 5,900 12,600 18500 17 900 Maintenance expense Accounts payable 900 23 2500 Cash Accounts receivable 2500 26 1800 Accounts receivable (Click to select) 1800 26 4400 Salaries expense Cash 4400 27 900 Accounts payable Cash 900 28 2900 Dividends Dividends payable 2900 29 (Click to select) (Click to select) 29 9000 Unexpired insurance Cash 9000 31 Utilities expense Accounts payable 31 (Click to select) (Click to select) (Click to select) Prepare the necessary adjusting entries for December. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) Debit Credit Date Dec. 31 General Journal (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) Prepare closing entries and post to ledger accounts. (Do not round intermediate calculations. Omit the "$" sign in your response.) General Journal Debit Credit Date Dec. 31 Rent fees earned Income summary 31 Income summary Salaries expense Maintenance expense Utilities expense |(Click to select) (Click to select) (Click to select) (Click to select) (Click to select) 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 2. value: 25.00 points Post the entries into the following ledger accounts. (Record the transactions in the given order. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) GENERAL LEDGER Cash Credit Debit Balance Date Dec. 1 1 1 8 12 15 23 26 27 29 31 Accounts Receivable Credit Debit Balance Date Dec. 15 23 31 31 Prepaid Rent Credit Debit Balance Date Dec. 1 31 Unexpired Insurance Credit Debit Balance Date Dec. 29 Office Supplies Credit Debit Balance Date Dec. 4 31 Rental Equipment Credit Debit Balance Date Dec. 1 Accumulated Depreciation: Rental Equipment Debit Credit Balance Date Dec. 31 Notes Payable Credit Debit Balance Date Dec. 1 Accounts Payable Credit Debit Balance Date Dec. 4 17 27 31 Interest Payable Credit Debit Balance Date Dec. 31 Salaries Payable Credit Debit Balance Date Dec. 31 Dividends Payable Credit Debit Balance Date Dec. 28 Unearned Rental Fees Credit Debit Balance Date 8 Dec. 31 Income Taxes Payable Credit Debit Balance Date Dec. 31 Share Capital Credit Debit Balance Date Dec. 1 Retained Earnings Credit Debit Balance Date Dec. 31 31 Dividends Credit Debit Balance Date Dec. 28 31 Income Summary Credit Debit Balance Date Dec. 31 m 31 31 Rental Fees Earned Credit Debit Balance Date Dec. 15 31 31 31 31 Salaries Expense Credit Debit Balance Date Dec. 12 26 31 III 31 Maintenance Expense Credit Debit Balance Date Dec. 17 30 Utilities Expense Credit Date Debit Balance Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Office Supplies Expense Credit Debit Balance Date Dec. 31 31 Depreciation Expense Credit Date Debit Balance Dec. 31 31 Interest Expense Credit Debit Balance Date Dec. 31 31 Depreciation Expense Credit Debit Balance Date Dec. 31 31 Interest Expense Credit Debit Balance Date Dec. 31 31 Income Taxes Expense Credit Debit Balance Date Dec. 31 31 3 . value: 10.00 points Prepare an income statement for the year ended December 31. (Input all amounts as positive values. Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2013 V Revenue: (Click to select) Expenses (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) V V $ (Click to select) (Click to select) (Click to select) $ 4. value: 5.00 points Prepare a statement of changes in equity for the year ended December 31. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Statement of Changes in Equity For the Year Ended December 31, 2013 $ Retained earnings, December 1, 2013 (Click to select) Subtotal (Click to select) IND Retained earnings, December 31, 2013 $ Prepare a statement of financial position (in report form) as at December 31. (Input all amounts as positive values. Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Statement of financial position December 31, 2013 $ V Assets (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) V A A Total Assets $ Liabilities & Equity Liabilities: (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) Total Liabilities $ Shareholders' equity: (Click to select) (Click to select) $ Total Shareholders' Equity $ HII Total Liabilities and Shareholders' Equity 6. value: 5.00 points Prepare an after-closing trial balance as of December 31. (The items in the Trial Balance should be grouped as follows: Assets in order of their liquidity), Liabilities in order of their liquidity) and Equity. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS After-Closing Trial Balance December 31, 2013 Debit $ Credit III V (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) V Totals