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COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS

a.
General Journal December Daily Transactions 2009 Dec 1 Debit Credit

The McGraw-Hill Companies, Inc., 2010 CP1

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a.
General Journal December Daily Transactions 2009 Dec

The McGraw-Hill Companies, Inc., 2010 CP1(p.2)

ENSIVE PROBLEM 1 UIPMENT RENTALS (continued)

The McGraw-Hill Companies, Inc., 2010 CP1(p.2)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a.
General Journal (Adjusting Entries) 2009 Dec

The McGraw-Hill Companies, Inc., 2010 CP1(p.3)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a. Date Dec Explanation Cash Debit Credit Balance

Date Dec

Explanation

Accounts Receivable Debit

Credit

Balance

Date Dec

Explanation

Prepaid Rent Debit

Credit

Balance

Date Dec

Explanation

Unexpired Insurance Debit

Credit

Balance

Date Dec

Explanation

Office Supplies Debit

Credit

Balance

The McGraw-Hill Companies, Inc., 2010 CP1(p.4)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a. Date Dec 1 Explanation Rental Equipment Debit Credit Balance

Date Dec 31

Accumulated Depreciation: Rental Equipment Explanation Debit Credit

Balance

Date Dec 1

Explanation

Notes Payable Debit

Credit

Balance

Date Dec

Explanation

Accounts Payable Debit

Credit

Balance

Date Dec

Explanation

Interest Payable Debit

Credit

Balance

The McGraw-Hill Companies, Inc., 2010 CP1(p.5)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a. Date Dec 31 Explanation Salaries Payable Debit Credit Balance

Date Dec 28

Explanation

Dividends Payable Debit

Credit

Balance

Date Dec

Explanation

Unearned Rental Fees Debit

Credit

Balance

Date Dec 31

Explanation

Income Taxes Payable Debit

Credit

Balance

Date Dec 1

Explanation

Capital Stock Debit

Credit

Balance

The McGraw-Hill Companies, Inc., 2010 CP1(p.6)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a. & d. Date Dec Explanation Retained Earnings Debit Credit Balance

Date Dec

Explanation

Dividends Debit

Credit

Balance

Date Dec

Explanation

Income Summary Debit

Credit

Balance

Date Dec

Explanation

Rental Fees Earned Debit

Credit

Balance

Date Dec

Explanation

Salaries Expense Debit

Credit

Balance

The McGraw-Hill Companies, Inc., 2010 CP1(p.7)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a. & d. Date Dec Explanation Maintenance Expense Debit Credit Balance

Date Dec 31 31

Explanation

Utilities Expense Debit

Credit

Balance

Date Dec 31 31 To close

Explanation

Rent Expense Debit 4,000

Credit 4,000

Balance 4,000 0

Date Dec 31 31

Explanation

Office Supplies Expense Debit

Credit

Balance

The McGraw-Hill Companies, Inc., 2010 CP1(p.8)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


a. & d. Date Dec Explanation Depreciation Expense Debit Credit Balance

Date Dec

Explanation

Interest Expense Debit

Credit

Balance

Date Dec

Explanation

Income Taxes Expense Debit

Credit

Balance

The McGraw-Hill Companies, Inc., 2010 CP1(p.9)

SUSQUEHANNA EQUIPMENT RENTALS Worksheet December 31, 2009


a. Trial Balance Debit Credit Balance sheet accounts : Cash Accounts receivable Prepaid rent Unexpired insurance Office supplies Rental equipment Notes payable Accounts payable Unearned rental fees Dividends payable Capital stock Retained earnings Dividends Interest payable Accum. Dep.: rental equip. Salaries payable Income taxes payable Income statement accounts: Rental fees earned Salaries expense Maintenance expense Utilities expense Rent expense Interest expense Depreciation expense Office supplies expense Income taxes expense
$ 65,000 8,400 12,000 9,600 1,000 240,000 $ 100,000 1,700 8,000 2,000 200,000 2,000 (b) (c) (g) (h) 38,000 10,400 600 700 $ 349,700 (g) (e) (f)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


Income Statement Debit Credit
$

Debit

Adjustments* Credit

Adjusted Trial Balance Debit Credit

Balance Sheet Debit Credit


$ -

(f) (a) (d)

(e)

$ 349,700 (a) (b) (c) (d) (h) $ $ $ $ $ 13,620 13,620 $ $ $ 13,620 13,620

Net income Totals * Adjustments (a) December rent expense ($12,000 3). (b) December interest expense ($100,000 x 6% x 1/12). (c) December depreciation expense ($240,000 96 months). (d) Office supplies used in December ($1,000 - $600).

(e) Portion of unearned revenue earned in December. (f) Accrued revenue earned in December. (g) Accrued salaries at month-end. (h) Accrued income taxes expense at month-end.

The McGraw-Hill Companies, Inc., 2010 CP1(p.10)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


b.
SUSQUEHANNA EQUIPMENT RENTALS Income Statement For the Year Ended December 31, 2009 Revenue: Expenses

Income before income taxes expense Income taxes expense @ 40% Net income

SUSQUEHANNA EQUIPMENT RENTALS Statement of Retained Earnings For the Year Ended December 31, 2009 Retained earnings, December 1, 2009 Subtotal Retained earnings, December 31, 2009

The McGraw-Hill Companies, Inc., 2010 CP1(p.11)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


b.
SUSQUEHANNA EQUIPMENT RENTALS Balance Sheet December 31, 2009 Assets

Total assets Liabilities & Owners' Equity Liabilities:

Stockholders' equity:

Total liabilities and stockholders' equity

c.

Notes to the financial statements: Note 1Depreciation policies

Note 2Maturity dates of liabilities

Note 3Pending litigation

The McGraw-Hill Companies, Inc., 2010 CP1(p.12)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (continued)


d.
General Journal (Closing Entries) 2009 Dec 31

31

31

31

e.
SUSQUEHANNA EQUIPMENT RENTALS After-Closing Trial Balance December 31, 2009

Totals

The McGraw-Hill Companies, Inc., 2010 CP1(p.13)

COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS (concluded)


f.

g.

The McGraw-Hill Companies, Inc., 2010 CP1(p.14)