Response to the following problem:
Polarscape Snow Services Ltd. was incorporated on December 1, 2015 and had the following transactions during its first month of operations.
Dec.
1 Issued share capital for $6,000 cash
1 Purchased a used truck for $9,000: paid $4 ,000 cash, balance due January 15
2 Purchased a $2,000 snowplough on credit to be attached to the truck (record as an increase in the cost of the truck)
5 Purchased salt, sand, and gravel on credit for $500 (recorded as an asset, unused supplies)
6 Paid truck operating expenses of $200
7 Paid $360 for a one-year truck insurance policy effective December 1 (record as an asset, prepaid expense)
14 Paid $1,500 in wages for two weeks
16 Paid $40 traffic ticket (record as truck operating expense)
20 Received a bill for $350 of truck repairs
24 Purchased tire chains on credit for $100 (recorded as truck operating expense)
24 Collected $3,500 of the amount billed December 3
27 Paid for the purchase made on December 5
28 Collected $400 for snow removal performed today for a new customer
28 Paid $1,500 in wages for two weeks
30 Called customers owing $1,500 billed December 3
31 Transferred the amount of December's truck insurance ($30) to insurance expense
31 Counted $100 of salt, sand, and gravel still on hand (record the amount used as supplies expense)
31 Recorded unpaid wages for three days applicable to December in the amount of $450
31 Billed customers $5,000 for December snow removal
31 Paid $200 dividend in cash.
Required:
1. Record the above transactions on a transactions worksheet and calculate the total of each column at the end of December. Use the following headings on your worksheet.
2. Prepare an income statement and a statement of changes in equity for the month-ended December 31, 2015, and a balance sheet at December 31. Identify the revenue as "Service Revenue". Record the expenses in alphabetical order.