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ACCT 101

SUSQUEHANNA COMPREHENSIVE PROBLEM #1


Journalize the December transactions
Dec 1

Cash

200000
Paid in Capital

Dec 1

Dec 1
Dec 4
Dec 8
Dec 12
Dec 15

Dec 17
Dec 23

200000

Equipment
Cash
Notes Payable

240000

Cash
Advance rent

12000

Office Supplies
Modern Office

1000

Cash
Unearned Fee rental

8000

Salary expense
Cash

5200

Cash
Receivables
Revenue earned

12000
6000

Repair expenses
Earth Movers Inc.

600

Cash

2000

140000
100000
12000
1000
8000
5200

18000
600

Receivables
Dec 26
Dec 27
Dec 28
Dec 29

2000

Salary expenses
Cash

5200

Earth Movers Inc.


Cash

600

Dividends
Dividends payable

20000

Prepaid Insurance

9600

5200
600
20000

Adjusting Entries
Dec 31

Advance rent
Rent

4000
4000

Dec 31
Dec 31
Dec 31
Dec 31
Dec 31

Interest expenses
Interest payable

5000

Accumulated Depreciation
Rental equipment

2500

Office supplies expenses


Office supplies

400

Unearned fee rental


Fees earned

3700

Salary expenses
Salary payable

1400

5000
2500
400
3700
1400

Date
1-Dec
8-Dec
15-Dec
23-Dec

Paid in capital
Unearned fee
rental
Revenue earned
Receivables

Total:

Date

Date
1-Dec
1-Dec

Cash
Notes payable
Total:

Date

Cash
Amount
200000

Equipment

Amount
140000

Advance Rent
Salary Expenses
Salary Expenses
Earth Movers
Pre paid insurance
Closing balance
Total:

12000
5200
5200
600
9600
49400
222000

Paid in capital
Amount
Date
1-Dec

Cash

Amount
200000

Equipments
Amount
Date
140000 31-Dec
100000 31-Dec
240000

Depreciation
Closing balance
Total:

Amount
2500
237500
240000

Notes payable
Amount
Date
1-Dec

Equipment

Amount
100000

8000
12000
2000

Date
1-Dec
1-Dec
12-Dec
26-Dec
27-Dec
29-Dec
31-Dec

222000

Office Supplies
Amount
Date

Date
4-Dec

Modern Office

Date

Date
31-Dec
31-Dec

Date
12-Dec

Amount

31-Dec

Office supplies
expenses

400

Modern Office
Amount
Date
4-Dec

Office Supplies

Amount
1000

Cash

Amount
8000

Total:

8000

1000

Revenue Earned
Closing balance
Total:

Unearned fee
rental
Amount
Date
3700
8-Dec
4300
8000

Cash

Salary Expenses
Amount
Date
5200 31-Dec

P/L account

Amount
11800

26-Dec

Cash

31-Dec

Salary payable
Total:

Date
15-Dec

Date
31-Dec

Date
27-Dec

Date
17-Dec

Date
28-Dec

Revenue earned

5200
1400
11800

Total:

Receivables
Amount
Date
6000 23-Dec
31-Dec
6000

Total:

Cash
Receivables
Unearned fee rental
Total:

Amount
12000
6000
3700
21700

Cash

Earth Movers Inc


Amount
Date
600 17-Dec

Repair Expenses

Amount
600

Earth Movers Inc

Repair Expenses
Amount
Date
600

Dividends Payable

Dividend
s
Amount
20000

P/L account

Amount

Dividends

Amount
20000

Amount

Cash

Pre paid Insurance


Amount
Date
9600

Amount

Advance rent

Rent
Amount
4000

Date
1-Dec

Amount

Date

Dividends Payable
Amount
Date
28-Dec

Date
31-Dec

Amount
2000
4000
6000

Revenue Earned
Amount
Date
21700 15-Dec
15-Dec
31-Dec
21700

Date

Date
29-Dec

Cash
Closing balance

11800

Cash

Date

Advance Rent
Amount
Date
12000 31-Dec
31-Dec

Rent
Closing balance

Amount
4000
8000

Date
31-Dec

Interest payable

Interest payable
Amount
Date
31-Dec

Date

Date
31-Dec

Interest expenses
Amount
Date
5000

Equipment

Amount

Interest expenses

Depreciation
Amount
Date
2500

Amount
5000

Amount

Office supplies expenses


Date
31-Dec

Date

Office supplies

Amount
400

Date

Amount

Salary Payable
Amount
Date

Amount

31-Dec

Salary

1400

Trial Balance
Accounts
Cash
Capital
Equipment
Notes payable
Office Supplies
Modern ofice
Unearned fee rental
Salary Expenses
Receivables
Revenue Earned
Repair Expenses
Dividends
Dividends Payable
Pre paid Insurance
Advance Rent
Rent
Interest expenses
Interest payable
Depreciation

Debit
49400

Credit
200000

237500
100000
600
1000
4300
11800
4000
21700
600
20000
20000
9600
8000
4000
5000
5000
2500

Office supplies expenses


Salary Payable

400
1400
$35340
0

$35340
0

Income Statement for the period 12/01 to 13/31


Revenue earned
Less: Expenses
Salary Expenses
Repair Expenses
Rent
Interest expenses
Depreciation

Office supplies expenses


Net Income (Loss)

21700
11800
600
4000
5000
2500
400

24300

(2600)

Statement of Retained earnings on Dec 31


Opening Balance
Add: Net income
Less: Dividends

0
(2600)
20000

Closing balance

(22600)

Balance Sheet of Susquehanna Equipment Rentals on Dec 31


Liabilities
Share holders equity
Paid in capital
Retained Earnings

200000
(22600)

177400

Long Term Liabilities


Notes payable

100000

100000

Short Term Liabilties


Accounts payable
Unearned fee
rental
Dividends Payable
Interest payable
Salary Payable

1000
4300
20000
5000
1400

Total:

31700
309100

Asset
s
Fixed Asset
Equipment

237500

237500

Current Assets
Cash
Office Supplies
Receivables
Pre paid Insurance
Advance Rent

49400
600
4000
9600
8000

71600

Total:

309100

f) During December, this companys cash balance has fallen from $200,000 to
$65,000. This does not appear headed for insolvency in the near future. Its
impossible to look at the companys bank balance for one month period and
evaluate the companys financial situation. Many factors come to play like the
account receivable or when the company has to pay for its purchases. So the
decrease in cash balance will not accurately prove that the company is headed for
insolvency.

g) I think it would be ethical for Patty Driver to maintain the accounting records for
this company as long as she keeps the integrity of the records. All transactions
usually have receipts and documents that come with it. This will help prevent
accountants to commit frauds .