In September, the company entered the following transactions: Sept. 1 Issued common shares to Tony Ferria and other investors in exchange for $100,000 cash. Sept 1 Paid $9,000 to Wellington Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It Sept 1 Purchased for $180,000 all the equipment formerly owned by Rent-It. Paid $70,000 cash and issued a one-year note payable for $110,000, plus interest at the annual rate of 9%. This rental equipment is estimated to have a 10-year useful life. Sept 4 Purchased office supplies on account from Modern Office Co., $1,630. Payment due in 30 days. (These supplies are expected to last for several months.) Sept 8 Received $10,000 cash from McFadden Construction Co. as advance payment for equipment rental. Sept 12 Paid salaries for the first two weeks in September, $3,600. Sept 15 Excluding the McFadden advance, equipment rental fees earned during the first 15 days of September amounted to $6,100, of which $5,300 was received in cash and $800 was an account receivable. Sept 17 Purchased on account from Earth Movers, Inc., $340 in parts needed to repair a rental tractor. Payment is due in 10 days. Sept 23 Collected $210 of the accounts receivable recorded on September 15. Sept 26 Rented a backhoe to Mission Landscaping at a price of $100 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks. Sept 26 Paid biweekly salaries, $3,600. Sept 27 Paid the account payable to Earth Movers, Inc., $340. Sept 28 Paid dividends of $2,000 cash. Sept 30 Received a bill for utilities expense for the month of September, $270. Payment is due in 30 days. Sept 30 Cash received from equipment rental during the second half of September, $6,450. The information available on September 30 is as follows: the office supplies on hand are estimated at $1,100; $4,840 of the advance payment from McFadden Construction Co. has been earned; salaries earned by employees since the last payroll are $900. Instructions: Prepare journal entries for the above transactions in September and post the transactions to the ledger, using T-accounts and adding any new accounts which you need. You may omit narratives to the journal entries. Prepare adjusting journal entries and post the adjustments to the T-accounts, adding any new accounts which you need. Note that some of the adjusting entries can be derived from the information provided in the various transactions from September 1 to September 30, in addition to the information available on September 30. Prepare a statement of earnings (income statement) for the month of September in good form. Prepare a statement of retained earnings for the month of September in good form. Prepare a classified statement of financial position (balance sheet) as of September 30 in good Prepare closing entries as of September 30.
In September, the company entered the following transactions:
Sept. 1 Issued common shares to Tony Ferria and other investors in exchange for $100,000 cash.
Sept 1 Paid $9,000 to Wellington Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It
Sept 1 Purchased for $180,000 all the equipment formerly owned by Rent-It. Paid $70,000 cash and issued a one-year note payable for $110,000, plus interest at the annual rate of 9%. This rental equipment is estimated to have a 10-year useful life.
Sept 4 Purchased office supplies on account from Modern Office Co., $1,630. Payment due in 30 days. (These supplies are expected to last for several months.)
Sept 8 Received $10,000 cash from McFadden Construction Co. as advance payment for equipment rental.
Sept 12 Paid salaries for the first two weeks in September, $3,600.
Sept 15 Excluding the McFadden advance, equipment rental fees earned during the first 15 days of September amounted to $6,100, of which $5,300 was received in cash and $800 was an account receivable.
Sept 17 Purchased on account from Earth Movers, Inc., $340 in parts needed to repair a rental tractor. Payment is due in 10 days.
Sept 23 Collected $210 of the accounts receivable recorded on September 15.
Sept 26 Rented a backhoe to Mission Landscaping at a price of $100 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks.
Sept 26 Paid biweekly salaries, $3,600.
Sept 27 Paid the account payable to Earth Movers, Inc., $340.
Sept 28 Paid dividends of $2,000 cash.
Sept 30 Received a bill for utilities expense for the month of September, $270. Payment is due in 30 days.
Sept 30 Cash received from equipment rental during the second half of September, $6,450.
The information available on September 30 is as follows: the office supplies on hand are estimated at $1,100; $4,840 of the advance payment from McFadden Construction Co. has been earned; salaries earned by employees since the last payroll are $900.
Instructions:
- Prepare
journal entries for the above transactions in September and post the transactions to the ledger, using T-accounts and adding any new accounts which you need. You may omit narratives to the journal entries. - Prepare adjusting journal entries and post the adjustments to the T-accounts, adding any new accounts which you need. Note that some of the
adjusting entries can be derived from the information provided in the various transactions from September 1 to September 30, in addition to the information available on September 30. - Prepare a statement of earnings (income statement) for the month of September in good form.
- Prepare a statement of retained earnings for the month of September in good form.
- Prepare a classified
statement of financial position (balance sheet) as of September 30 in good - Prepare closing entries as of September 30.
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