Question

The following unadjusted trial balance contains the accounts and balances of Dylan Delivery Company as of December 31. a. Unrecorded depreciation on the trucks at the end of the year is $9,602 b. The total amount of accrued interest expense at year-end is $8,000. c. The cost of unused office supplies still available at year-end is $1,500. 1. Use the above information about the company's adjustments to complete a 10-column work sheet. 2a. Prepare the year-end closing entries for Dylan Delivery Company as of December 31 2b. Determine the capital amount to be reported on the December 31, balance sheet. Note: S. Dylan, Capital was $72,882 on December 31 of the prior year.

Answer 1

DYLAN DELIVERY COMPANY
.WORK SHEET
FOR THE YEAR ENDED DECEMBER 31
									Balance sheet and statement
	Unadjusted trial balance		Adjustments		Adjusted trial balance		income statement		of owner's equity
Account Title	Dr	Cr	Dr	Cr	Dr	Cr	Dr	Cr	Dr	Cr
Cash	$ 17,500				$ 17,500				$ 17,500
Accounts receivable	$ 28,000				$ 28,000				$ 28,000
Office supplies	$ 2,500			(C) $ 1000 {2500-1500}	$ 1,500				$ 1,500
Trucks	$ 220,000				$ 220,000				$ 220,000
Accumulated depreciation-Trucks		$ 90,000		(A)$ 9,602		$ 99,602				$ 99,602
Land	$ 140,000				$ 140,000				$ 140,000
Accounts payable		$ 27,475				$ 27,475				$ 27,475
Interest payable		$ 5,000		B)$3,000 {8,000-5000}		$ 8,000				$ 8,000
long term notes payable		$ 130,000				$ 130,000				$ 130,000
S.Dylan capital		$ 72,882				$ 72,882				$ 72,882
S.Dylan Withdrawals	$ 38,000				$ 38,000				$ 38,000
Delivery fees earned		$ 320,075				$ 320,075		$ 320,075
Depreciation expenses- Trucks	$ 40,000		(A)$ 9,602		$49,602 {40,000+9602}		$49,602
Salaries expense	$ 134,432				$ 134,432		$ 134,432
Office supplies expense	$ 11,000		(C) $ 1000 {2500-1500}		$ 12,000 {11000+1000}		$ 12,000
Interest expense	$5,000		B)$3,000 {8,000-5000}		$ 8,000 {5000+3000}		$ 8,000
Rent expense-trucks	$ 9,000				$ 9,000		$ 9,000
Totals	$645,432	$645,432	$ 13,602	$ 13,602	$ 658,034	$ 658,034	$ 213,034	$ 320,075	$ 445,000	$ 337,959
Net income							$ 107,041 {320075-213034}			$ 107,041
Totals							$ 320,075		$ 445,000	$ 445,000

Required 2 A :

No	Date	General Journal	Debit	Credit
1)	Dec-31	Delivery fees earned	$ 320,075
		Income Summary		$ 320,075
		(To record close revenues to income summary )
2)	Dec-31	Income Summary	$ 213,034
		Depreciation expenses- Trucks		$49,602
		Salaries expense		$ 134,432
		Office supplies expense		$ 12,000
		Interest expense		$ 8,000
		Rent expense-trucks		$ 9,000
		(To record close expenses to income summary )
3)	Dec-31	Income Summary	$ 107,041
		S.Dylan capital		$ 107,041
		(To record income summary to capital )
4)	Dec-31	S.Dylan capital
		S.Dylan Withdrawals		$ 38,000
		(To record close withdrawals to capital )

Required 2 B :

S.Dylan capital

$ 141,923

EXPLANATION IS GIVEN BELOW :

DYLAN DELIVERY COMPANY
STATEMENT OF OWNER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31
Beginning Balance	$ 72,882
Add: Net income	$ 107,041
	$ 179,923
Less: Owner's Withdrawals	($38,000)
Ending Balance	$ 141,923