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-lt , an equipment rental company that was going out of business. The newly formed company uses the following accounts: Cash Share Capital Accounts Receivable Retained Earnings Prepaid Rent Dividends Unexpired Insurance Income Summary Office Supplies Rental Fees Earned Rental Equipment Salaries Expense Accumulated Depreciation 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 Income Taxes Payable 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 25,000 new shares in exchange for a total of $250,000 cash. Dec. 1 Purchased for $240,000 all of the equipment formerly owned by Rent-it. Paid $136,000 cash and issued a one-year note payable for $104,000. The notes, plus all 12-months of accrued interest, are due 30 November 2013. Dec. 1 Paid $9,900 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., $2,000. Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.) Dec. 8 Received $8.700 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, $4,600. Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18.400, of which $13,000 was received in cash. Dec. 17 Purchased on account from Earth Movers Limited, $800 in parts needed to repair a rental tractor. (Debit an expense account) Payment is due in 10 days. Dec 23 Collected $2,300 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, $4,600. Dec. 27 Paid the account payable to Earth Movers Limited, $800. 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 a $27,000 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 $9.480. 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 $660. Payment is due in 30 days. Dec 31 Equipment rental fees earned during the second half of December amounted to $20,100, of which $15.600 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-lt 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 $690. e. During December, the company earned $4,000 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 $1,800 at month- h. It is estimated that the company is subject to an income tax rate of 40 percent of profit before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2014. end. 1. value: 60.00 points Journalize the December transactions. Do not record adjusting entries at this point. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) General Journal Credit Date Dec. 1 Debit 25000 Cash Share Capital 25000 1 240000 Rental equipment Cash Notes payable Prepaid rent Cash 136,000 104,000 1 9900 9900 4 2000 Office supplies Accounts payable 2000 8 8700 Cash Unearned rental fees 8700 12 4600 Salaries expense Cash 4600 15 Cash Accounts receivable Rental fees earned 13,000 5,400 18400 17 800 Maintenance expense Accounts payable 800 23 2300 Cash Accounts receivable 2300 26 0 No joumal entry required No journal entry required 0 26 4600 Salaries expense Cash 4600 27 800 Accounts payable Cash 800 28 2500 Dividends Dividends payable 2500 0 0 29 No journal entry required No journal entry required 29 Unexpired insurance Cash 9480 9480 31 660 Utilities expense Accounts payable 660 31 Cash Accounts receivable (Click to select) 15,600 4,500 20100 Prepare the necessary adjusting entries for December. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) General Journal Credit Date Dec. 31 Rent expense Prepaid rent Debit 3300 3300 31 520 Interest expense Interest payable 520 31 2500 2500 Depreciation expense Accumulated depreciation: Rental equip. Office supplies expense Office supplies 31 1310 1310 31 4700 Utilities expense Rental fees earned 4700 31 1800 Accounts receivable Rental fees earned 1800 31 1800 Salaries expense Salaries payable 1800 31 (Click to select) (Click to select) Prepare closing entries and post to ledger accounts. (Do not round intermediate calculations. Omit the "$" sign in your response.) 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) V V 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 2. value: 30.00 points Post the entries into the following ledger accounts. (Record the transactions in the given order. Leave no cells blank - be certain to enter "o" wherever required. Omit the "S" sign in your response.) GENERAL LEDGER Cash Debit Date Dec Credit Balance 1 1 1 SBB%8mm; 23 WONG 27 29 31 Debit Accounts Receivable Credit Balance Date Dec. 15 23 31 31 Debit Prepaid Rent Credit Balance Date Dec. 1 31 Unexpired Insurance Credit Date Debit Balance Dec. 29 Office Supplies Credit Debit Balance Date Dec. 4 31 Debit Rental Equipment Credit 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 Date Interest Payable Credit Debit Balance 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 Dec. 8 31 Income Taxes Payable Credit Date Dec. 31 Debit Balance Debit Share Capital Credit 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 31 31 Rental Fees Earned Credit Debit Balance Date Dec. 15 31 31 31 31 Salaries Expense Credit Debit Balance Date Dec. 12 28 31 31 Maintenance Expense Credit Debit Balance Date Dec. 17 30 Utilities Expense Credit Debit Balance Date Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Debit Office Supplies Expense Credit 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 "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2013 Revenue: (Click to select) Expenses (Click to select) Click to select) (Click to select) Click to select (Click to select) (Click to select) (Click to select) V V S Click to select) (Click to select) (Click to select) Utilities Expense Credit Debit Balance Date Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Debit Office Supplies Expense Credit Balance Date Dec. 31 31 Depreciation Expense Credit Debit Balance Date Dec. 31 31 Interest Expense Credit Debit Balance Date Dec. 31 31 Income Taxes Expense Credit Debit Balance Date Dec. 31 31 3. value: 10.00 points Prepare an income statement for the year ended December 31. (Input all amounts as positive values. Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2013 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 S Click to select) (Click to select) (Click to select) Utilities Expense Credit Debit Balance Date Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Debit Office Supplies Expense Credit 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 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 S Click to select) (Click to select) (Click to select) 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-lt , an equipment rental company that was going out of business. The newly formed company uses the following accounts: Cash Share Capital Accounts Receivable Retained Earnings Prepaid Rent Dividends Unexpired Insurance Income Summary Office Supplies Rental Fees Earned Rental Equipment Salaries Expense Accumulated Depreciation 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 Income Taxes Payable 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 25,000 new shares in exchange for a total of $250,000 cash. Dec. 1 Purchased for $240,000 all of the equipment formerly owned by Rent-it. Paid $136,000 cash and issued a one-year note payable for $104,000. The notes, plus all 12-months of accrued interest, are due 30 November 2013. Dec. 1 Paid $9,900 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., $2,000. Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.) Dec. 8 Received $8.700 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, $4,600. Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18.400, of which $13,000 was received in cash. Dec. 17 Purchased on account from Earth Movers Limited, $800 in parts needed to repair a rental tractor. (Debit an expense account) Payment is due in 10 days. Dec 23 Collected $2,300 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, $4,600. Dec. 27 Paid the account payable to Earth Movers Limited, $800. 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 a $27,000 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 $9.480. 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 $660. Payment is due in 30 days. Dec 31 Equipment rental fees earned during the second half of December amounted to $20,100, of which $15.600 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-lt 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 $690. e. During December, the company earned $4,000 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 $1,800 at month- h. It is estimated that the company is subject to an income tax rate of 40 percent of profit before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2014. end. 1. value: 60.00 points Journalize the December transactions. Do not record adjusting entries at this point. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) General Journal Credit Date Dec. 1 Debit 25000 Cash Share Capital 25000 1 240000 Rental equipment Cash Notes payable Prepaid rent Cash 136,000 104,000 1 9900 9900 4 2000 Office supplies Accounts payable 2000 8 8700 Cash Unearned rental fees 8700 12 4600 Salaries expense Cash 4600 15 Cash Accounts receivable Rental fees earned 13,000 5,400 18400 17 800 Maintenance expense Accounts payable 800 23 2300 Cash Accounts receivable 2300 26 0 No joumal entry required No journal entry required 0 26 4600 Salaries expense Cash 4600 27 800 Accounts payable Cash 800 28 2500 Dividends Dividends payable 2500 0 0 29 No journal entry required No journal entry required 29 Unexpired insurance Cash 9480 9480 31 660 Utilities expense Accounts payable 660 31 Cash Accounts receivable (Click to select) 15,600 4,500 20100 Prepare the necessary adjusting entries for December. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) General Journal Credit Date Dec. 31 Rent expense Prepaid rent Debit 3300 3300 31 520 Interest expense Interest payable 520 31 2500 2500 Depreciation expense Accumulated depreciation: Rental equip. Office supplies expense Office supplies 31 1310 1310 31 4700 Utilities expense Rental fees earned 4700 31 1800 Accounts receivable Rental fees earned 1800 31 1800 Salaries expense Salaries payable 1800 31 (Click to select) (Click to select) Prepare closing entries and post to ledger accounts. (Do not round intermediate calculations. Omit the "$" sign in your response.) 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) V V 31 (Click to select) (Click to select) 31 (Click to select) (Click to select) 2. value: 30.00 points Post the entries into the following ledger accounts. (Record the transactions in the given order. Leave no cells blank - be certain to enter "o" wherever required. Omit the "S" sign in your response.) GENERAL LEDGER Cash Debit Date Dec Credit Balance 1 1 1 SBB%8mm; 23 WONG 27 29 31 Debit Accounts Receivable Credit Balance Date Dec. 15 23 31 31 Debit Prepaid Rent Credit Balance Date Dec. 1 31 Unexpired Insurance Credit Date Debit Balance Dec. 29 Office Supplies Credit Debit Balance Date Dec. 4 31 Debit Rental Equipment Credit 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 Date Interest Payable Credit Debit Balance 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 Dec. 8 31 Income Taxes Payable Credit Date Dec. 31 Debit Balance Debit Share Capital Credit 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 31 31 Rental Fees Earned Credit Debit Balance Date Dec. 15 31 31 31 31 Salaries Expense Credit Debit Balance Date Dec. 12 28 31 31 Maintenance Expense Credit Debit Balance Date Dec. 17 30 Utilities Expense Credit Debit Balance Date Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Debit Office Supplies Expense Credit 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 "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2013 Revenue: (Click to select) Expenses (Click to select) Click to select) (Click to select) Click to select (Click to select) (Click to select) (Click to select) V V S Click to select) (Click to select) (Click to select) Utilities Expense Credit Debit Balance Date Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Debit Office Supplies Expense Credit Balance Date Dec. 31 31 Depreciation Expense Credit Debit Balance Date Dec. 31 31 Interest Expense Credit Debit Balance Date Dec. 31 31 Income Taxes Expense Credit Debit Balance Date Dec. 31 31 3. value: 10.00 points Prepare an income statement for the year ended December 31. (Input all amounts as positive values. Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2013 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 S Click to select) (Click to select) (Click to select) Utilities Expense Credit Debit Balance Date Dec. 31 31 Rent Expense Credit Debit Balance Date Dec. 31 31 Debit Office Supplies Expense Credit 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 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 S Click to select) (Click to select) (Click to select)