The please follow format of t answer sheet ignore which I had answered On 1 Dece

Question

The pleasefollow format of t answer sheet ignore which I had answered 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:

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 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 Share Capital Retained Earnings Dividends Income Summary Rental Fees Earned Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense Interest Expense Income Taxes Expense The corporation performs adjusting entries monthly. Closing entries are performed annually on 31 December. During December, the corporation entered into the following transactions

Explanation / Answer

Date Account Title Debit Credit 1-Dec Cash 290000 Share Capital 290000 Rental Equipment 201600 Cash 139000 Notes Payable 62600 Prepaid Rent 11100 Cash 11100 4-Dec Office Supplies 1000 Accounts Payable 1000 8-Dec Cash 8600 Unearned Rental fees 8600 12-Dec Salaries Expense 5100 Cash 5100 15-Dec Cash 12200 Accounts Receivable 6700 Rental Fees Earned 18900 17-Dec Maintenance Expense 600 Accounts Payable 600 23-Dec Cash 2900 Accounts Receivable 2900 26-Dec Adjusting Entry   f. Salaries Expense 5100 Cash 5100 27-Dec Accounts Payable 600 Cash 600 28-Dec Dividends(29000*0.1) 2900 Dividends Payable 2900 29-Dec Unexpired Insurance 9600 Cash 9600 31-Dec Utilities Expense 600 Accounts Payable 600 Cash 16300 Accounts Receivable 4300 Rental Fees Earned 20600 Adjusting Entries a. Rent Expense 3700 Prepaid Rent 3700 (11100/3) b. Interest expense 313 Interest Payable 313 (62600*6%/12) c. Depreciation Expense 25200 Accumulated Depreciation-Rental Equipment 25200 (201600/8) d. Office supplies expense 340 Office supplies 340 (1000-660) e. Unearned Rental Fees 4300 Rental Fees Earned 4300 f. Accounts Receivable 1680 Rental Fees Earned 1680 (280*6) g. Salaries Expense 1600 Salaries Payable 1600 h. Income Taxes expense 1171 Income taxes payable 1171 617504 617504 LEDGER ACCOUNTS Net Balances Date Account Title Debit Credit Debit Credit 4-Dec Accounts Payable 1000 17-Dec Accounts Payable 600 27-Dec Accounts Payable 600 31-Dec Accounts Payable 600 1600 15-Dec Accounts Receivable 6700 23-Dec Accounts Receivable 2900 31-Dec Accounts Receivable 4300 f. Accounts Receivable 1680 9780 Accumulated Depreciation-Rental Equipment 25200 25200 1-Dec Cash 290000 1-Dec Cash 139000 1-Dec Cash 11100 8-Dec Cash 8600 12-Dec Cash 5100 15-Dec Cash 12200 23-Dec Cash 2900 26-Dec Cash 5100 27-Dec Cash 600 29-Dec Cash 9600 31-Dec Cash 16300 159500 c. Depreciation Expense 25200 25200 28-Dec Dividends Payable 2900 2900 28-Dec Dividends 2900 2900 h. Income Taxes expense 1171 1171 Income taxes payable 1171 1171 b. Interest expense 313 313 Interest Payable 313 313 17-Dec Maintenance Expense 600 600 1-Dec Notes Payable 62600 62600 4-Dec Office Supplies 1000 Office supplies 340 660 d. Office supplies expense 340 340 1-Dec Prepaid Rent 11100 Prepaid Rent 3700 7400 a. Rent Expense 3700 3700 1-Dec Rental Equipment 201600 201600 15-Dec Rental Fees Earned 18900 31-Dec Rental Fees Earned 20600 Rental Fees Earned 4300 Rental Fees Earned 1680 45480 12-Dec Salaries Expense 5100 26-Dec Salaries Expense 5100 g. Salaries Expense 1600 11800 Salaries Payable 1600 1600 1-Dec Share Capital 290000 290000 1-Dec Unearned Rental fees 8600 4300 e. Unearned Rental Fees 4300 29-Dec Unexpired Insurance 9600 9600 31-Dec Utilities Expense 600 600 617504 617504 435164 435164 Trial Balance as at Dec 31 Debit Credit Cash 159500 Accounts Receivable 9780 Office supplies 660 Prepaid Rent 7400 Unexpired Insurance 9600 Rental Equipment 201600 Accumulated Depreciation-Rental Equipment 25200 Accounts Payable 1600 Unearned Rental Fees 4300 Income taxes payable 1171 Salaries Payable 1600 Dividends Payable 2900 Interest Payable 313 Notes Payable 62600 Share Capital 290000 Rental Fees Earned 45480 Utilities Expense 600 Salaries Expense 11800 Rent Expense 3700 Maintenance Expense 600 Depreciation Expense 25200 Office supplies expense 340 Interest expense 313 Income Taxes expense 1171 Dividends 2900 Total 435164 435164 Income statement For the Year ended Dec.31 Rental Fees Earned 45480 Less: expenses: Utilities Expense 600 Salaries Expense 11800 Rent Expense 3700 Maintenance Expense 600 Depreciation Expense 25200 Office supplies expense 340 Interest expense 313 Total expenses 42553 Income before tax 2927 Less:Income tax expense at 40% 1171 Net Income 1756 Statement of Retained earnings as at dec 31 Beginning balance 0 Current month net Income 1756 Less: Dividends 2900 Ending balance -1144 Balance Sheet As at Dec 31, Assets Cash 159500 Accounts Receivable 9780 Office supplies 660 Prepaid Rent 7400 Unexpired Insurance 9600 Rental Equipment 201600 Less: Accumulated Depreciation-Rental Equipment -25200 Total Assets 363340 Liabilities & Equity Accounts Payable 1600 Unearned Rental Fees 4300 Income taxes payable 1171 Salaries Payable 1600 Dividends Payable 2900 Interest Payable 313 Notes Payable 62600 Total Liabilities 74484 Share Capital 290000 Retained Earnings (1756-2900) -1144 Total equity 288856 Total Liabilities & equity 363340

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