Question

Required information (The following information applies to the questions displayed below.] Francine's Fast Deliveries, Inc. (FFD) was organized in December of 2011. It had limited activity in 2011. The resulting balance sheet at the beginning of 2012 is provided below: of 6 Francine's Fast Deliveries, Inc. Balance Sheet at January 1, 2012 Liabilities: Accounts Payable Stockholders' Equity: Contributed Capital Retained Earnings Assets: Cash $ 250 $ 875 Accounts Receivable Supplies 450 250 ook $1,000 325 nt Total Assets $1,575 Total Liabilities & Stk. Equity $1,575 January Transactions for Francine's Fast Deliveries, Inc. (FFD) Date 1 Owners invest $18,000 of additional cash in the business. 2a Supplies are purchased for $550 on account. 2b Insurance is paid for 12 months beginning January 1: $6,060 (Record as an asset) 2c Rent is paid for 3 months beginning in January: $2,550 (Record as an asset) 2d Two employees are hired. Each employee will be paid $870 per month 3 FFD borrows $21,000 from 1st State Bank at 6% annual interest. Prev of 6 Next

Answer 1

Francine's Fast Deliveries Inc. Debit in $Credit in $ 18000 18000 550 550 Journal Enteries Date Particulars 1.1.2012 Cash a/c Dr. To Contributed Capital (Capital Invested) 2.1.2012 Supplies a/c Dr. To Accounts Payable (Supplies on account) 2.1.2012 Prepaid Insurance a/c Dr. To Cash (12 months insurance paid) 2.1.2012 Prepaid Rent a/c Dr. To Cash (3 months rent paid) 2.1.2012 No Entry 6060 6060 2550 2550 21000 21000 28800 28800 315 315 200 200 8200 8200 Dr. 5740 3.1.2012 Cash a/c Dr. To Loan (Loan taken 6% interest) 6.1.2012 Delivery Van a/c Dr. To Cash (Delivery van purchased) 7.1.2012 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 8.1.2012 Accounts Payable a/c Dr. To Cash (Creditors paid) 9.1.2012 Accounts Receivable a/c Dr. To Service Revenue (Services on account) 10.1.2012 Cash a/c To Service Revenue (Services for cash) 16.1.2012 Wages Expense a/c Dr. To Cash lWages paid) 20.1.2012 Cash a/c Dr. To Unearned Service Revenue (Advance from client) 25.1.2012 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 30.1.2012 Wages Expense a/c Dr. To Wages Payable (Wages accrued) 435 x 2 30.1.2012 Utility Expense a/c Dr. To Accounts Payable (Expense accrued) 5740 1 870 870 2150 2150 3280 3280 870 870 545) 545

Debit in $Credit in $ 640 640 1290 1290 105 105 Adjusting Enteries Date Particulars 31.1.2012 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 250 + 550 - 160 31.1.2012 Unearned Service Revenue a/c Dr, To Service Revenue (Service earned) 31.1.2012 Interest Expense a/c Dr, To Interest Payable (Interest accrued) 21000 x 6% x 1/12 31.1.2012 Depreciation Expense - Equip a/c Dr. To Accumulated Depreciation - Equip (To record depreciation) 28800/(4x 12) 31.1.2012 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) 31.1.2012 Rent Expense a/c Dr. To Prepaid Rent (Rent expensed) 600 600 505 1 850 850

Adjusted Trial Balance For the month ending 31.1.2012 505 Particulars Cash Accounts Receivable Supplies Prepaid Insurance Prepaid Rent Delivery Van Accumulated Depreciation - Equip Accounts Payable Interest Payable Unearned Service Revenue Wages Payable Loan Contributed Capital Retained Earnings Service Revenue Wages Expense Utility Expense Supplies Expense Interest Expense Depreciation Expense - Equip Rent Expense Insurance Expense Totals Unadjusted Adjustment Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 12880 12880 5055 5055 800 640 160 6060 5555 2550 850 1700 28800 28800 600 600 600 545 1145 105 105 2150 1290 860 870 870 21000 21000 19000 19000 325 325 13940 1290 15230 870 870 1740 545 545 640 640 105 600 600 850 850 505 505 57015 570155405540559135 59135 105

15230 1740 Statement of Income For the month ending 31.1.2012 Service Revenue Less: Wages Expense Utility Expense Supplies Expense Interest Expense Depreciation Expense - Equip Rent Expense Insurance Expense Net Income 545 640 105 600 850 505 4985 10245 Statement of Retained earnings For the month ending 31.1.2012 1.1.2012 Net Income 325 10245 10570

Amounts in $ Amounts in $ 1145 105 860 870 2980 ENT Balance sheet As at 31.1.2012 Assets Amounts in $ Amounts in $ Liabilities Current Assets Current Liabilities Cash 12880 Accounts Payable Accounts Receivable 5055 Interest Payable Supplies 160 Unearned Service Revenue Prepaid Insurance 5555 Wages Payable Prepaid Rent 1700 25350 Non Current Liabilities Non Current Assets Loan Delivery Van 28800 Accumulated Depreci -600 28200 Shareholders Equity Contributed Capital Retained Earnings Total Assets 53550 Total Liabilities & Equity 21000 19000 10570 29570 53550