On 1 December 2013, John and Patty Driver formed a corporation called Susquehanno 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 Uneared 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: Dec. 1 issued to John and Patty Driver 29.000 new shares in exchange for a total of $290,000 cash. Dec. 1 Purchased for $192,000 all of the equipment formerly owned by Rent-it. Paid $132,000 cash and issued a one-year note payable for $60,000. The notes, plus al 12-months of accrued interest, are due 30 November 2013 Dec. 1 Paid $11100 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. $1,600. Payment due in 30 days. (These supplies are expected to last for several months: debit the Office Supplies asset account.) Dec. 8 Received $8.500 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, $5,100. Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,800, of which $12,000 was received in cash. Dec. 17 Purchased on account from Earth Movers Limited, $700 in parts needed to repair a rental tractor. (Debit an expense account) Payment is due in 10 days. Dec. 23 Collected $3,000 of the accounts receivable recorded on 15 December Dec. 26 Rented a backhoe to Mission Landscaping at a price of $310 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, $5,100. Dec. 27 Paid the account payable to Earth Movers Limited, $700. 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 $23,000 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 $9,240. 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 in Davenport on 26 December Dec. 31 Received a bill from Universal Utilities for the month of December, $620. Payment is due in 30 days. Dec. 31 Equipment rental fees earned during the second half of December amounted to $20,800, of which $15,800 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 $680. e. During December, the company earned $3,800 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 $1,800 at month- end. h. It is estimated that the company is subject to an income tax rate of 30 percent of profit before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2014. 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.) Date General Journal Debit Credit Dec 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) (Click to select) (Click to select) 31 Prepare closing entries and post to ledger accounts (Do not round intermediate calculations. Omit the "S" sign in your response.) Date General Journal Debit Credit Dec. 31 (Click to select) (Click to select) 31 . . 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) . : . 31 (Click to select) (Click to select) . 31 . (Click to select) (Click to select) . Post the entries into the following ledger accounts. (Record the transactions in the given order. Leave no cells blank - be certain to enter "o" wherever required. Omit the "S" sign in your response.) GENERAL LEDGER Cash Date Debit Credit Balance Dec 1 1 1 8 12 15 23 26 27 29 31 Debit Accounts Receivable Credit Balance Date Dec. 15 23 31 31 Date Debit Prepaid Rent Credit Balance Dec. 1 31 Debit Unexpired Insurance Credit Balance Date Dec. 29 Debit Office Supplies Credit Balance Date Dec. 4 31 Rental Equipment Credit Debit Balance Date Dec Accumulated Depreciation Rental Equipment Debit Date Dec. 31 Credit Balance Debit Notes Payable Credit Date Dec 1 Balance Debit Accounts Payable Credit Balance Date Dec 4 17 27 31 Debit Interest Payable Credit Balance Date Dec. 31 Salaries Payable Credit Debit Date Dec. 31 Balance Dividends Payable Credit Debit Balance Date Dec. 28 Debit Unearned Rental Fees Credit Balance Date Dec. 8 31 Date Debit Income Taxes Payable Credit Balance Dec. 31 Debit Share Capital Credit Balance Date Dec 1 Debit Retained Earnings Credit Balance Date Dec. 31 31 Debit Dividends Credit Balance Date Dec. 28 31 Income Summary Credit Debit Balance Date Dec. 31 31 31 Rental Fees Earned Credit Debit Balance Date Dec 15 31 31 31 31 Debit Salaries Expense Credit Balance Date Dec 12 26 31 31 Maintenance Expense Debit Credit Balance Date Dec 17 30 Utilities Expense Debit Credit Balance Date Dec. 31 31 Debit Rent Expense Credit Balance Dale Dec 31 31 Debit Office Supplies Expense Credit Balance Dale Dec. 31 31 Depreciation Expense Credit Debit Balance Date Dec. 31 31 Debit Interest Expense Credit Balance Date Dec. 31 31 Debit Income Taxes Expense Credit Balance Date Dec. 31 31 e 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 "S" sign in your response) SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2013 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) . (Click to select) (Click to select) 2 . (Click to select) value: 10.00 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 wherever required. Omit the "S" 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 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 Assets (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) 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 Total Liabilities and Shareholders' Equity $ 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 "S" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS After-Closing Trial Balance December 31, 2013 Debit Credit (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) Totals (8) Please note the following when you work on your assignment: a) Question 1 to 6: Question 1 to 6 is a comprehensive problem of the accounting cycle: in Question 1, you are required to journalize transactions and prepare closing entries. Please journalize all transactions in Question 1 and complete Question 2 to 5 FIRST before preparing closing entries in Question 1. After you have completed closing entries in Question 1, please go to Question 2 again to post the closing entries to ledger and then move on Question 6. There was a typing mistake for the comprehensive question in CONNECT. The following is the second transaction on Dec 1 extracted from the question. The correct date should be November 30, 2014 instead of 2013. X Dec. 1 Issued to John and Patty Driver 20,000 new shares 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 $100,000. The notes plus all 12 months of occrued Interest, are due November 30,2013-> should be 2014 b) Question 4: There was a typing mistake for this question on CONNECT. Actually, you are required to prepare a "statement of retained earnings" instead of a "statement of changes in equity". Please refer the details of the mistakes extracted from the question as follows: Prepare a statement of changes in equity (should be statement of retained earnings) for the year ended December 31. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Statement of Changes in Equity Retained Earnings For the Year Ended December 31, 2013 c) Question 5 and 6: Both questions 5 and 6 are required to list Assets and Liabilities in order of their liquidity. Please find below the list of Assets and Liabilities in order of their liquidity for your reference. 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 ***