Question

RECORD ALL ADJUST ENTRIES

C4-6 Recording/Posting Transactions and Adjustments, and Preparing Trial Balances and Financial Statements-Requires Calculating Depreciation and Interest (Chapters 2, 3, and 4) (LO 2-3, LO 3-3, LO 4- 2, LO 4-4) Fast Deliveries, Inc. (FDI), was organized in December last year and had limited activity last year. The resulting balance sheet at the beginning of the current year is provided below: $ 700 Assets: Cash Accounts Receivable Supplies $11,600 880 370 FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity: Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 11,430 720 Total Assets $12,850 $12,850 Two employees have been hired, at a monthly salary of $2,360 each. The following transactions occurred during January of the current year. Ch. January $5,700 is paid for 12 months' insurance starting January 1. (Record as an asset.) $4,800 is paid for 12 months of rent beginning January 1. (Record as an asset.) FDI borrows $25,200 cash from First State Bank at 5% annual interest; this note is payable in two years. A delivery van is purchased using cash. Including tax, the total cost was $19,200. Stockholders contribute $5,000 of additional cash to FDI for its common stock. Additional supplies costing $1,500 are purchased on account and received. $800 of accounts receivable arising from last year's December sales are collected. $400 of accounts payable from December of last year are paid. Performed services for customers on account. Sent invoices totaling $10,000. $7.990 of services are performed for customers who naid immediately in cash. ON 10

Answer 1

Credit Calculation Adjusting entries Date Account 31a Utilities expense Accounts Payable Debit $ 1,100 $ 1,100 31b $ 1,580 =370+1,500-290 Supplies expense Supplies $ 1,580 310 $ 2,400 -4,000*60% Deferred Revenue Service revenue $ 2,400 31d $ 105 =25,200*5%*1/12 Interest expense Interest Payable $ 105 31e $ 400 =19,200/4*1/12 Depreciation expense Accumulated Depreciation $ 400 31f $ 2,360 =1,180*2 Salaries & Wages expense Salaries & Wages Payable $ 2,360 31g $ 475 =5,700/12 Insurance expense Prepaid Insurance $ 475 31g $ 400 -4,800/12 Rent expense Prepaid Rent $ 400

Fast Deliveries, Inc. Journal entries Date Account 1-Jan Prepaid Insurance Cash Credit Debit $ 5,700 $ 5,700 $ 4,800 2-Jan Prepaid Rent Cash $ 4,800 $ 25,200 3-Jan Cash Notes payable (long term) $ 25,200 $ 19,200 4-Jan Equipment Cash $ 19,200 $ 5,000 5-Jan Cash Common Stock $ 5,000 $ 1,500 6-Jan Supplies Accounts Payable $ 1,500 $ 800 7-Jan Cash Accounts Receivable $ 800 $ 400 8-Jan Accounts Payable Cash $ 400 $ 10,000 9-Jan Accounts Receivable Service revenue $ 10,000 $ 7,900 10-Jan Cash Service revenue $ 7,900 $ 2,360 16-Jan Salaries & Wages expense Cash $ 2,360 $ 4,000 20-Jan Cash Deferred Revenue $ 4,000 $ 4,300 25-Jan Cash Accounts Receivable $ 4,300

Credit Date Credit Date Credit Date Credit Fast Deliveries, Inc. T Accounts Date Debit Date Cash Op bal 11,600 1-Jan 3-Jan 25,200 2-Jan 5-Jan 5,000 4-Jan 7-Jan 800 8-Jan 10-Jan 7,900 16-Jan 20-Jan 4,000 25-Jan 4,300 Debit Date Accounts Receivable 880 7-Jan 10,000 25-Jan Debit Date Supplies 370 1,500 Debit Date Prepaid Insurance 5,700 31g 1-Jan Op bal 9-Jan 800 Op bal 4,300 6 -Jan 475 5,700 4,800 19,200 400 2,360 31b 1,580 Bal. Bal. Bal. 290 Bal. 26,340 Prepaid Rent 4,800 31g 5,780 Equipment 19,200 Accumulated Depreciation 2-Jan 400 4 -Jan 3le 400 8-Jan 5,225 Accounts Payable 400 Op bal 6-Jan 31a 700 1,500 1,100 Bal. Bal. 400 2,900 4,400 Deferred Revenue 2,400 25-Jan 19,200 Notes payable (long term) 3-Jan Bal. Salaries & Wages Payable Interest Payable 310 4,000 25,200 310 105 31f 2,360 1,600 Bal. 25,200 Bal. 105 Bal. 2,360 Bal. Common Stock Op bal 5-Jan Retained Earnings Op bal 720 11,430 5,000 Bal. 16,430 720 Bal. Salaries & Wages expense 16-Jan 2,360 31f 2,360 Utilities expense 1,100 Supplies expense 1,580 Service revenue 9-Jan 10-Jan 31c 31b 10,000 7,900 2,400 20,300 Bal. Bal. Bal. Bal. Interest expense 105 4,720 Insurance expense 475 1,100 Rent expense 400 1,580 Depreciation expense 400 310 31g Bal. 105 475 Bal. 400 400

Unadjusted TB Debit Credit 26,340 5,780 1,870 5,700 4,800 19,200 Fast Deliveries, Inc. Account Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Deferred Revenue Salaries & Wages Payable Interest Payable Notes payable (long term) Common Stock Retained Earnings Service revenue Salaries & Wages expense Utilities expense Supplies expense Depreciation expense Insurance expense Rent expense Interest expense Totals Adjusted TB Debit Credit 26,340 5,780 290 4,400 5,225 19,200 400 2,900 1,600 2,360 105 25,200 16,430 1,800 4,000 25,200 16,430 720 17,900 720 20,300 2,360 4,720 1,100 1,580 400 475 400 105 70,015 66,050 66,050 70,015