[The following Information applies to the questions displayed below] On December 1. Year 1, 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, Capital Stock Retained Earnings Dividends Income Summary Rental Fees Earned Salaries Expense 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 Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense Interest Expense Income Taxes Expense Dec. 1 Issued to John and Patty Driver 21,800 shares of capital stock in exchange for a total of $210,000 cash. Dec. 1 Purchased for $249,600 all of the equipment formerly owned by Rent-It. Paid $135,00 cash and issued a 1-year note payable for $114,600. The note, plus all 12 months of accrued interest) are due November 30, Year 2. Dec. 1 Paid $11,780 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., $1,688. Payment due in 30 days. These supplies are expected to last for several months; debit the Office Supplies asset account. ) Dec. 8. Received 89, vee cash as advance payment on equipment rental from MeNaver construction company. (Credit Unearned Rental Fees.) Dec. 12 Paid salaries of $4,990 for the first two weeks in December Dec.15 Excluding the McNamer advanco, equipment rental fees earned during the first 15 days of December amounted to $18,800, of which 512,888 was received in cash Dec.17 Purchased on account from Earth Movers, Inc., $1,000 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 is. Dec.26 sented a backhoe to Mission Landscaping at a price of $336 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, $4,900 Dec. 27 Paid the account payable to tarth Movers, Inc., $1,000 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 $21,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the cented 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 fel and broke his arn. 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 $9,000. 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 5680. Payment is due in 30 days Dec.31 Equipment rental fees earned during the second half of December amounted to $21,000, of which 525 700 was received in cash. a Data for Adjusting Entries 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 $610 e. During December , the company earned $3.900 of the rental fees pald 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 $1,500 at month-end. h. It is estimated that the company is subject to a combined federal and state Income tax rate of 30 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2 Prepare a statement of retained earnings for the year ended December 31. (Round your final answers to the nearest whole dollar.) SUSQUEHANNA EQUIPMENT RENTALS Statement of Retained Earnings For the Year Ended December 31, Year 1 Retained earnings. December 1 Year 1 $ 0 Retained earnings December 31, Year 1 ENTRALE Iru A C DO BAND 83.300 3.600 SI DEOS COS DE OOO 01010 ALZO 2.000 00018 24.1 15 1,000 20.000 114000 114.000 2210 2006 2000 Balance sheet ons Cash Acous on Pred Ofice supplies Rental uport No pay Accounts payable Urmed rettes Dividende payabile Capitulo Retained and Dividende Inayable Accum depreti Safepayable Income Day content on en med 114000 0 100 1121001 210000 3.100 DO 002 2.1001 210.000 2000 20 3.100 21001 20301 CORE 0013 2000 1.500 600 10 2007 5150 600 008 1900 TEXCO 1000 100 Manager pene 560 OS 31000 99 Fate it wre Ospecte per Office 3.600 by 2.300 90 LOR 4500 090 [The following Information applies to the questions displayed below] On December 1. Year 1, 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, Capital Stock Retained Earnings Dividends Income Summary Rental Fees Earned Salaries Expense 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 Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense Interest Expense Income Taxes Expense Dec. 1 Issued to John and Patty Driver 21,800 shares of capital stock in exchange for a total of $210,000 cash. Dec. 1 Purchased for $249,600 all of the equipment formerly owned by Rent-It. Paid $135,00 cash and issued a 1-year note payable for $114,600. The note, plus all 12 months of accrued interest) are due November 30, Year 2. Dec. 1 Paid $11,780 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., $1,688. Payment due in 30 days. These supplies are expected to last for several months; debit the Office Supplies asset account. ) Dec. 8. Received 89, vee cash as advance payment on equipment rental from MeNaver construction company. (Credit Unearned Rental Fees.) Dec. 12 Paid salaries of $4,990 for the first two weeks in December Dec.15 Excluding the McNamer advanco, equipment rental fees earned during the first 15 days of December amounted to $18,800, of which 512,888 was received in cash Dec.17 Purchased on account from Earth Movers, Inc., $1,000 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 is. Dec.26 sented a backhoe to Mission Landscaping at a price of $336 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, $4,900 Dec. 27 Paid the account payable to tarth Movers, Inc., $1,000 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 $21,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the cented 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 fel and broke his arn. 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 $9,000. 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 5680. Payment is due in 30 days Dec.31 Equipment rental fees earned during the second half of December amounted to $21,000, of which 525 700 was received in cash. a Data for Adjusting Entries 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 $610 e. During December , the company earned $3.900 of the rental fees pald 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 $1,500 at month-end. h. It is estimated that the company is subject to a combined federal and state Income tax rate of 30 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2 Prepare a statement of retained earnings for the year ended December 31. (Round your final answers to the nearest whole dollar.) SUSQUEHANNA EQUIPMENT RENTALS Statement of Retained Earnings For the Year Ended December 31, Year 1 Retained earnings. December 1 Year 1 $ 0 Retained earnings December 31, Year 1 ENTRALE Iru A C DO BAND 83.300 3.600 SI DEOS COS DE OOO 01010 ALZO 2.000 00018 24.1 15 1,000 20.000 114000 114.000 2210 2006 2000 Balance sheet ons Cash Acous on Pred Ofice supplies Rental uport No pay Accounts payable Urmed rettes Dividende payabile Capitulo Retained and Dividende Inayable Accum depreti Safepayable Income Day content on en med 114000 0 100 1121001 210000 3.100 DO 002 2.1001 210.000 2000 20 3.100 21001 20301 CORE 0013 2000 1.500 600 10 2007 5150 600 008 1900 TEXCO 1000 100 Manager pene 560 OS 31000 99 Fate it wre Ospecte per Office 3.600 by 2.300 90 LOR 4500 090