The corporation performs adjusting entries monthly. Closing entries 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 Driver 24,000 new shares in exchange for a total of $240,000 cash. Dec. 1 Purchased for $259,200 all of the equipment formerly owned by Rent-It. Paid $140,000 cash and issued a 1-year note payable for $119,200. The note, plus all 12 months of accrued interest, are due November 30, Year 2. Dec. 1 Paid $10,800 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., $1,400. 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 of $5,100 for the first two weeks in December. Dec.15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,400, of which $12,600 was received in cash. Dec.17 Purchased on account from Earth Movers, Inc., $900 in parts needed to perform basic maintenance on a rental tractor. Payment is due in 10 days. Dec.23 Collected $2,800 of the accounts receivable recorded on December 15. Dec.26 Rented a backhoe to Mission Landscaping at a price of $260 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, Inc., $900. Dec.28 Declared a dividend of 10 cents per share, payable on January 15, Year 2. Dec.29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co- defendant in a $30,000 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 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 $9,120. 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, Year 2, 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, $680. 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.

The corporation performs adjusting entries monthly. Closing entries 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 Driver 24,000 new shares in exchange for a total of $240,000 cash. Dec. 1 Purchased for $259,200 all of the equipent formerly owned by Rent-It. Paid $140,000 cash and issued a 1 -year note payable for $119,200. The note, plus all 12 months of accrued interest, are due Novenber 30 , Year 2. Dec. 1 Paid $10, bee 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., \$1,400. Payment due in 38 days. (these supplies are expected to last for several nonths; debit the office Supplies asset account.) Dec. \& Ileceived $5,300 cash as advance payment on equipment rental fron Mcllamer Construction Conpany. (Credit Unearned Rental Fees.) Dec.12 Paid salaries of $5,100 for the first two weeks in Decenber. Dec. 15 Excluding the McNaser advance, equipment rental fees earned during the first 15 days of Decenber anounted to $18,400, of which $12,600 was received in cash. Dec.17 Purchased on account fron Earth Movers, Inc., $900 in parts needed to perforn basic naintenance on a rental tractor. Payment is due in 10 days. Dec.23 Collected $2,800 of the accounts receivable recorded on Decenber 15. Dec. 26 Rented a backhoe to Mission Landscaping at a price of $260 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weoks. Dec.26 Paid biwekly salaries, 55,100. Dec.27 Paid the account payable to Earth Movers, Inc., $900. Dec.28 Declared a dividend of 10 cents per share, payable on January 15, Year 2. Dec.29 Susquehanna Equipent Rentals was naned, along with Mission Landscaping and Collier Construction, as a codefendant in a \$30, e00 lawsuit filed on behalf of Kevin Davenport. Mission tandscaping had left the rented backhoe in a fenced construction site owned by collier construction. After warking hours on Deceeber 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 company's legal and financial responsibility for this accident, if any, cannot be detereined at this time. (Noter This event does not require a journal entry ot this tiee, but nay require disclosure in notes accompanying the statements.) Dec.29 Purchased a 12 -month public 1iability insurance policy for $9,120. This policy protects the conpany ogainst liability for injuries and property damage caused by its equipment. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the injuries sustained by Kevin Davenport on Decenber 26. Dec.31 Received a bill from Universal Ueilities for the aonth of Decenber, \$680. Payment is due in 30 days. Dec.31 Equipent rental fees earned during the second half of December anounted to $20, 000 , of which $15,600 was received in cash. Date for Adjusting Entries in Yeor 1 a. The advance payment of rent on Decembet 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 depreclated by the straight line method over a period of eight years Any salvage value at the end of its useful tife is expected to be negtigible and immateriat d. Office supplies on hand at December 31 are estimated at $610 e. During Decembec, the compary earned $4,300 of the rental fees paid in advance by MeNamer Construction Company on December 8 . t. As of December 31 , six days' rent on the backhoe rented to Mission Landscaping on December 26 has been eamed g. Salarles camed by employees since the last paytoll date (December 26 ) amounted to $1,900 at month end. h. It is estimated that the company is subject to an income tax rate of 30 percont of profit before income taxes fotal revenue minus all expenses other than income taxes) These taws wili be payable in Year 2. Prepare a Statement of Financial Position (in report form) as of December 3t (Amounts to be deducted should be indicoted by a minus sign. Round your final answers to the nearest whole dollor.) Required information [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 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. The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31 . Duting December of its first year of operations, the corporation entered into the following transactions