Great Deal! Get Instant \$10 FREE in Account on First Order + 10% Cashback on Every Order Order Now

# attacthed is an accounting problem with the excel sheet that will have to be used for this problem, please do not create a new excel sheet you will have to use the one that I provided

Comprehensive Problem Instructions
1. You will find Comprehensive Problem #1 at the end of Chapter 5 in your text (after all of the exercises and problems)
2. Download the template provided for this assignment. Please note, you must use the templates provide. Do not create your own Excel sheets.
3. Iâ€™ve included a sheet to use, you will see different sheets (tabs) that need completing. Each sheet shows a different part of the problem you must complete.
4. When completing the problems you must show the Function used in Excel. Excel Functions are predefined formulas within Excel. In other words, you cannot just put the numeric answer in a cell. You must instruct Excel to do the specific computation you would like. This is required; otherwise, credit for your work will not be given. An example, the function =SUM(A1:A3, C1:C2, E2) will add the values of all cells.
5. Complete and submit your solution as one file attachment.
6. All Parts are to be completed using the provided Excel Template file In the Module
7. All supporting calculations are to be shown.
8. Make sure you save your work while completing this problem.
9. There are several parts to these comprehensive problems, so please allow enough time to complete it and review it before handing it in.
10. Complete and submit your solution as one file attachment.
11. All Parts are to be completed using the provided Excel Template file In the Module
12. All supporting calculations are to be shown.
13. Make sure you save your work while completing this problem.
14. There are several parts to these comprehensive problems, so please allow enough time to complete it and review it before handing it in.
Check Figures:
ect 'Trial Balance' is included on the provided Excel Template file in the Module. There should be eight separate adjusting entries.
Net income should be \$16,344.
COMPREHENSIVE PROBLEM 1
Susquehanna Equipment Rentals
A COMPREHENSIVE ACCOUNTING CYCLE PROBLEM
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-It, an equipment rental company that was going out of business. The newly formed company uses the following accounts.
Cash XXXXXXXXXXIncome Taxes Payable
Accounts Receivable XXXXXXXXXXCapital Stock
Prepaid Rent XXXXXXXXXXRetained Earnings
Unexpired Insurance XXXXXXXXXXDividends
Office Supplies XXXXXXXXXXIncome Summary
Rental Equipment XXXXXXXXXXRental Fees Earned
Accumulated Depreciation: Salaries Expense
Rental Equipment XXXXXXXXXXMaintenance Expense
Notes Payable XXXXXXXXXXUtilities Expense
Accounts Payable XXXXXXXXXXRent Expense
Interest Payable     Office Supplies Expense
Salaries Payable XXXXXXXXXXDepreciation Expense
Dividends Payable XXXXXXXXXXInterest Expense
Unearned Rental Fees XXXXXXXXXXIncome Taxes Expense
The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December of its first year of operations, the corporation entered into the following transactions.

Dec. 1    Issued to John and Patty Driver 20,000 shares of capital stock in exchange for a total of \$240,000 cash.
Dec. 1    Purchased for \$288,000 all of the equipment formerly owned by Rent-It. Paid \$168,000 cash and issued a 1-year note payable for \$120,000. The note, plus all 12 months of accrued interest, are due November 30, Year 2.
Dec. 1    Paid \$14,400 to Shapiro Realty as three monthsâ€™ advance rent on the rental yard and office formerly occupied by Rent-It.
Dec. 4    Purchased office supplies on account from Modern Office Co., \$1,200. Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.)
Dec. 8    Received \$9,600 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.)
Dec. 12    Paid salaries of \$6,240 for the first two weeks in December.
Dec. 15    Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to \$21,600, of which \$14,400 was received in cash.
Dec. 17    Purchased on account from Earth Movers, Inc., \$720 in parts needed to perform basic maintenance on a rental tractor. Payment is due in 10 days.
Dec. 23    Collected \$2,400 of the accounts receivable recorded on December 15.page 248
Dec. 26    Rented a backhoe to Mission Landscaping at a price of \$300 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, \$6,240.
Dec. 27    Paid the account payable to Earth Movers, Inc., \$720.
Dec. 28    Declared a dividend of 12 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 a \$30,000 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
oke his arm. The extent of the companyâ€™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 \$11,520. 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, \$840. Payment is due in 30 days.
Dec. 31    Equipment rental fees earned during the second half of December amounted to \$24,000, of which \$18,720 was received in cash.
Data for Adjusting Entries in Year 1
a. The advance payment of rent on December 1 covered a period of three months.
. 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 \$720.
e. During December, the company earned \$4,440 of the rental fees paid in advance by McNamer Construction Company on December 8.
f. As of December 31, six daysâ€™ 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 \$1,680 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 Year 2.
Instructions
a. Perform the following steps of the accounting cycle for the month of December, Year 1.
1. Journalize the December transactions. Do not record adjusting entries at this point.
2. Post the December transactions to the appropriate ledger accounts.
3. Prepare the unadjusted trial balance columns of a 10-column worksheet for the year ended December 31.
4. Prepare the necessary adjusting entries on December 31.
5. Post the December adjusting entries to the appropriate ledger accounts.
6. Complete the 10-column worksheet for the year ended December 31.
B. Prepare an income statement and statement of retained earnings for the year ended December 31, and a balance sheet as of December 31, Year 1.
C. Prepare required disclosures to accompany the financial statements dated December 31, Year 1. Your disclosures should include separate write-ups addressing each of the following areas: (1) depreciation policy, (2) maturity dates of major liabilities, and (3) potential liability due to pending litigation.
D. Prepare closing entries and post them to ledger accounts.
E. Prepare an after-closing trial balance as of December 31, Year 1.
F. During December, the companyâ€™s cash balance fell from \$240,000 to \$78,000. Does this imply that the business is headed for insolvency in the near future? Explain your reasoning.
G. Would it be ethical for Patty Driver to maintain the accounting records for this company, or must they be maintained by someone who is independent of the organization?

CP1-Desc.
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
Susquehanna Equipment Rentals                        5 to 6 hours
This comprehensive problem combines material from Chapters 3-5. It can be performed individually or as a group assignment. The problem is structured as a mini-practice set illustrating the entire accounting cycle of a service-type business. It requires students to record basic transactions and to prepare both adjusting and closing entries. It also requires the completion of worksheet composed of columns for the trial balance, adjustments, adjusted trial balance, income statement, and balance sheet. After preparing the company's financial statements and several footnote disclosures, students are asked to evaluate its solvency and to answer a series of open-ended questions.                         Strong

&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1
5 to 6 hours, Strong                COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS

a.
General Journal
December Daily Transactions
Year 1
Dec    1

1

1

4

8

12

15

17
23
26
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1(p.2)
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
(continued)
a.
General Journal
December Daily Transactions
Year 1
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1(p.3)
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
(continued)
a.
General Journal
Year 1
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1(p.4)
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
(continued)
a.         Cash
Date        Explanation        Debit    Credit    Balance
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1(p.5)
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
(continued)
a.        Rental Equipment
Date        Explanation        Debit    Credit    Balance
Dec    1             288,000         288,000

Accumulated Depreciation: Rental Equipment
Date        Explanation        Debit    Credit    Balance
Dec    31                  3,000    3,000

Notes Payable
Date        Explanation        Debit    Credit    Balance

Answered 4 days After Feb 17, 2024

## Solution

Nitish Lath answered on Feb 22 2024
CP1-Desc.
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
Susquehanna Equipment Rentals                        5 to 6 hours
This comprehensive problem combines material from Chapters 3-5. It can be performed individually or as a group assignment. The problem is structured as a mini-practice set illustrating the entire accounting cycle of a service-type business. It requires students to record basic transactions and to prepare both adjusting and closing entries. It also requires the completion of worksheet composed of columns for the trial balance, adjustments, adjusted trial balance, income statement, and balance sheet. After preparing the company's financial statements and several footnote disclosures, students are asked to evaluate its solvency and to answer a series of open-ended questions.                         Strong

&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1
5 to 6 hours, Strong                COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS

a.
General Journal
December Daily Transactions
Year 1
Dec    1    Cash            240,000
Capital stock            240,000
To record issuance of capital stock
1    Rental Equipment            288,000
Cash            168,000
Notes payable            120,000
To record purchase of equipment

1    Prepaid rent            14,400
Cash            14,400
To record payment of prepaid rent
4    Office supplies            1,200
Accounts payable            1,200
To record purchase of office supplies

8    Cash            9,600
Unearned rental fees            9,600
To record advance for rental services
12    Salaries expenses            6,240
Cash            6,240
To record payment of salaries expenses

15    Cash            14,400
Accounts receivable            7,200
Rental fees earned            21,600
To record rental fee earned
17    Maintenance expenses            720
Accounts payable            720
To record maintenance expenses
23    Cash            2,400
Accounts receivables            2,400
To record collection from customers
26    Salaries expenses            6,240
Cash            6,240
To record salaries expenses
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1(p.2)
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
(continued)
a.
General Journal
December Daily Transactions
Year 1
Dec    27    Accounts payable            720
Cash            720
To record payment to accounts payable
28    Dividends            2,400
Dividends payable            2,400
To record accrued dividend
29    Unexpired insurance            11,520
Cash            11,520
To record prepaid insurance
31    Utilities expenses            840
Accounts payable            840
To record utilities payable
31    Cash            18,720
Accounts receivables            5,280
Rental fee earned            24,000
To record rental fee earned
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1(p.3)
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
(continued)
a.
General Journal
Year 1
31    Rent expenses            4,800
Prepaid rent            4,800
To record rent expenses
31    Interest expenses            600
Interest payable            600
To record interest accrual
31    Depreciation expenses            3,000
Accumulated depreciation- equipment            3,000
To record depreciation expenses
31    Office supplies expenses            480
Office supplies            480
To record office supplies used
31    Unearned rental fee            4,400
Rental fee earned            4,400
To record earned rental fee
31    Accounts receivables            1,800
Rental fee earned            \$ 1,800
To record accrued revenue
31    Salaries expenses            1,680
Salaries payable            1,680
To record accrued salaries
31    Income tax expenses            10,880
Income tax payable            10,880
To record interest expenses accrual
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
&9Â© The McGraw-Hill Companies, Inc., 2012
&A
CP1(p.4)
COMPREHENSIVE PROBLEM 1
SUSQUEHANNA EQUIPMENT RENTALS
(continued)
a.         Cash
Date        Explanation        Debit    Credit    Balance
1    Capital...
SOLUTION.PDF