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 Income Taxes Payable Accounts Receivable Share Capital Prepaid Rent Retained Earnings Unexpired Insurance Dividends Office Supplies Income Summary Rental Equipment Rental Fees Earned Accumulated Depreciation Salaries Expense Rental Equipment Maintenance Expense Notes Payable Utilities Expense Accounts Payable Rent Expense Interest Payable Office Supplies Expense Salaries Payable Depreciation Expense Dividends Payable Interest Expense Unearned Rental Fees Income Taxes Expense The corporation performs adjusting entries monthly Closing entries are performed annually on December 31 During December, the corporation entered into the following transactions 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 accrued interest, are due November 30, 2013 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 Unearned 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 Limited, $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 Limited, $600 Dec 28 Declared a dividend of 10 cents per share, payable on January 15, 2014 Dec 29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co defendant in a $25,000 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 December 26, 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 companys 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 $9,600 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, 2014, and affords no coverage for the injuries sustained by Kevin Davenport on December 26 Dec 31 Received a bill from Universal Utilities for the month of December, $700 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 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 Co on December 8 f As of December 31, six days rent on the backhoe rented to Mission Landscaping on December 26 has been earned g Salaries earned by employees since the last payroll date (December 26) amounted to $1,400 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 Q1 Prepare the necessary adjusting entries for December (Do not round intermediate calculations Omit the $ sign in your response ) Q2 Prepare closing entries and post to ledger accounts (Do not round intermediate calculations Omit the $ sign in your response ) Q3 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 ) Q4 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 ) Q5 Prepare a 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 ) Q6 Prepare a statement of financial position (in report form) as of 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 ) Q7 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 )

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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

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	Income Taxes Payable
Accounts Receivable	Share Capital
Prepaid Rent	Retained Earnings
Unexpired Insurance	Dividends
Office Supplies	Income Summary
Rental Equipment	Rental Fees Earned
Accumulated Depreciation:	Salaries Expense
Rental Equipment	Maintenance Expense
Notes Payable	Utilities Expense
Accounts Payable	Rent Expense
Interest Payable	Office Supplies Expense
Salaries Payable	Depreciation Expense
Dividends Payable	Interest Expense
Unearned Rental Fees	Income Taxes Expense

The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December, the corporation entered into the following transactions:

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 accrued interest, are due November 30, 2013.
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 Unearned 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 Limited, $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 Limited, $600.
Dec.	28	Declared a dividend of 10 cents per share, payable on January 15, 2014.
Dec.	29	Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $25,000 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 December 26, 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 companys 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 $9,600. 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, 2014, and affords no coverage for the injuries sustained by Kevin Davenport on December 26.
Dec.	31	Received a bill from Universal Utilities for the month of December, $700. 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

The advance payment of rent on December 1 covered a period of three months.

The annual interest rate on the note payable to Rent-It is 6 percent.

The rental equipment is being depreciated by the straight-line method over a period of eight years.

Office supplies on hand at December 31 are estimated at $600.

During December, the company earned $3,700 of the rental fees paid in advance by McNamer Construction Co. on December 8.

As of December 31, six days rent on the backhoe rented to Mission Landscaping on December 26 has been earned.

Salaries earned by employees since the last payroll date (December 26) amounted to $1,400 at month-end.

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.

Q1:

Prepare the necessary adjusting entries for December. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Q2:

Prepare closing entries and post to ledger accounts. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Q3:

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.)

Q4:

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.)

Q5:

Prepare a 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.)

Q6:

Prepare a statement of financial position (in report form) as of 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.)

Q7:

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.)