Question

company uses the following accounts:

Cash Income Taxes Payable Accounts Receivable Capital Stock Prepaid Rent Retained Earnings Unexpired Insurance Dividends Office Supplies Income Summary Rental Equipment Rental Fees Earned Accumulated Depreciation: Salaries Expense 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

Dec. 1 Issued to John and Patty Driver 20,000 shares of capital stock in exchange for a total of 400.000 cash.

Dec. 1 Purchased for 260.000 11 of the equipment formerly owned by Rent-It. Paid 160.000 cash and issued a one-year note payable for $100,000.

Dec. 1 Paid 15.000 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., 3000 Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.)

Dec. 8 Received 10.000 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 10.200 Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to 28.000, of which $12,000 was received in cast

Dec. 17 Purchased on account from Earth Movers, Inc 1.600 in parts needed to repair a rental tractor (Debit an expense account.) Payment is due in 10 days.

Dec. 23 Collected 6.000 of the accounts receivable recorded on December 15.

Dec. 23 Rented a backhoe to Mission Landscaping at a price of $250 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoc for about two or three weeks.

Dec. 26 Paid biweekly salaries.10.200

Dec. 27 Paid the account payable to Earth Movers, Inc. 1,600

Dec. 28 Declared a dividend of 20 cents per share, payable on January 15, 2010.
Comprehensive problem 245

Dec. 29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $25,000 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 $9,600. 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, 2010, 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, $700. 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. Data for Adjusting Entries Doonmhar 1 covered a period of three months.
no coverage for the injuries sustained by Kevin Davenport on December 26. January 1, 2010, and affords

Dec. 31 Received a bill from Universal Utilities for the month of December, $700. 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. Data for Adjusting Entries

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.

d. Office supplies on hand at December 31 are estimated at $600

. e. During December, the company earned $3,700 of the rental fees paid in advance by McNamer Construction Co. on December 8.

f. As of December 31, six days' rent on the backhoe rented to Mission Landscaping on December 23 has been earned. g. Salaries earned by employees since the last payroll date (December 26) amounted to $1,400 at month-end.

h. It is estimated that the company is subject to a combined federal and state income tax rate of 40 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2010. Instructions a. Perform the following steps of the accounting cycle for the month of December: Tournalize the December transactions do not record adiusting entries at this point.

only adjusted trial balance and balance sheet please

Answer 1

Adjusted Trial balance
For the month ended 31 Dec
	$	$
Cash	237,000
Income Taxes Payable		5,796.80
Accounts Receivable	15,900
Capital Stock		4,00,000
Prepaid Rent	10,000
Retained Earnings
Unexpired Insurance	9,600
Dividends	4,000
Office Supplies	600
Income Summary
Rental Equipment	260,000
Rental Fees Earned		53,200
Accumulated Depreciation: Rental Equipment		2,708
Salaries Expense	21,800
Maintenance Expense	1,600
Notes Payable		100,000
Utilities Expense	700
Accounts Payable		3,700
Rent Expense	5,000
Interest Payable		500
Office Supplies Expense	2,400
Salaries Payable		1,400
Depreciation Expense	2,708
Dividends Payable		4,000
Interest Expense	500
Unearned Rental Fees		6,300
Income Taxes Expense	5,796.80
Total	577,604.80	577,604.80

Income Statment
For the month ended 31 Dec
	$	$
Rental Fees Earned		53,200
Less: Expenses
Salaries Expense	21,800
Maintenance Expense	1,600
Utilities Expenses	700
Rent Expense	5,000
Dividends	4,000
Office Supplies Expense	2,400
Depreciation Expense	2,708
Interest Expense	500
Total Expenses		38,708
Profit before tax		14,492
Income Tax @ 40%		5,796.80
Profit after tax		8,695.20

Balance Sheet
For the month ended 31 Dec
	$	$
ASSETS
Rental Equipment	25,7292
Accounts Receivable	15,900
Prepaid Rent	10,000
Unexpired Insurance	9,600
Office Supplies	600
Cash	237,000
Total Assets		530,392
Equity and Liabilities
Equity
Common Stock	400,000
Retained Earnings	8,695.20
Total Equity		408,695
Liabilities
Notes Payable	100,000
Income Taxes Payable	5,796.80
Accounts Payable	3700
Interest Payable	500
Salaries Payable	1400
Dividends Payable	4000
Unearned Rental Fees	6300
Total Liabiities		121,696.8
Total Equity and Liabilities		530,392