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[The following information applies to the questions displayed below.] On December 1. Year 1. John and Patty Drlver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations Immedately 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. The corporation performs adjusting entrles monthly. Closing entrles are performed annually on December 31. During December of Its first year of operations, the corporation entered Into the following transactions. Dec. 1 Issued to John and Patty oriver 25,6ee nev shares in exchange for a total of $259, 6ee cash. Dec. 1 Purchased for $249,60e all of the equipment formerly awned by Rent-It. Paid $131,669 cash and issued a 1-year note payable for $118,69. The note, plus all 12 morths of accrued interest, are due november 3 , Year 2. Dec. 1 Paid \$19, zee to shapiro Realty as three morths' advance rent on the rental yard and office formerly occupied by Rent-It. Dec. 4 Purchased office supplies on account from rodern office co., $1,200. Payment due in 30 days. (These supplies are expected to last. for several morths; debit the office supplies asset account.) Dec. B Received $8,200 cash as advance payment on equipment rental from MeNamer Construction Company. (Credit Lnearned Rental Fees.) Dec. 12 Paid salaries of $5,200 for the first two weeks in December. Dec. 15 Excluding the Meklamer aduance, equipment rental fees earned during the first 15 days of Decenber ambunted to $18,200, of which $12,90 was received in cash. Dec. F Purchased on account from Earth Movers, inc., \$wee in parts needed to perform basic maintenance on a rental tractor. Payment is due in 19 days. Dec. 23 collected $2,200 of the accourts receivable recorded on Decenter 15 . Dec.26 Rented a backhoe to Mission Landscaping at a price of \$3ee per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three wreeks. Dec. 26 Paid biweekly salaries, $5,260. Dec.27 Paid the acoount payable to Earth Movers, Inc., \$2ee. Dec.26 Declared a dividend of 19 cents per share, payable on January 15, Year 2. Dec. 2 susquehanna Equipment Rentals was named, along with iassion Landscaping and collier construction, as a -defendant in a \$33, lavsuit filed on behalf of kevin oavenport. Mission Landscaping had left the rented backhoe in a fenced construction site awned by collier construction. After working hours on Decenber 26, Davenport had climbed the fence to play on parked construction equipment. Hhile playing on the backhoe, he fell and broke his arm. The extent of the company's leqal and financial responsibility for this accident, if any, cannot be determined at this time. (wote: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements.) Dec.z Purchased a 12-morth public liability insurance policy for q, geo. This policy protects the company against liability for injuries and property damqge caused by its equipment. However, the policy poes into effect on January 1, Year 2, and affords no uverze for the injuries sustained by kevin Davenport on Decenter 26 . Dec.31 Received a bill from Universal utilities for the morth of Decenber, \$eee. Payment is due in 39 days. Dec.31 Equipment rental fees earned during the second half of Decenber amourted to $20, 5ee, of which $16, 30e was received in cash. Date for Acljusting Entrles In Year 1 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. Any salvage value at the end of its useful life is expected to be negligible and immaterial. d. Office supplies on hand at December 31 are estimated at $670. e. During December, the company earmed $4,100 of the rental fees paid in advance by McNamer Construction Company 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 $1,100 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 itotal revenue minus all expenses other than income taxes). These taxes will be payable in Year 2. epare a Statement of Financial Position (in report form) as of December 31. (Amounts to be cheductedshoukd be Inclkated by a nus sken. Round your tinal anwers to the nearest whole clollar.|