Question

Required Information 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. Assets see Accounts Receivable Supplies $11.700 620 410 FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 11.45e 480 $12.730 $12.73 Total Assets Two employees have been hired, at a monthly salary of $2,660 each. The following transactions occurred during January of the current year. Ch. January $6.000 is paid for 12 months' insurance starting January 1. (Record as an asset.) 53.600 is paid for 12 months of rent beginning January 1 (Record as an asset.) FOI borrows $26.400 cash from First State Bank at 5 annual interest: this note is payable in two years. Adelivery van is purchased using cash. Including tax, the total cost was $19.200 Stockholders contribute 5,000 of additional cash to Fol for its common stock Additional Supplies casting 50 are purchased on account and received 50 of accounts receivable arising from last year's December sales are collected 5700 of accounts payable from December of last year are paid performed services for customers on account Sent invoices totaling $11.700 $7,700 of services are performed for customers who paid imediately in cash. 52.66 of salaries are paid for the first half of the month For receives s3,900 cash from customer for an advance order for services to be provided later in January and in February 1

Answer 1

Fast Deliveries, Inc. Journal entries Date Account 1-Jan Prepaid Insurance Cash Credit Calculation Debit $ 6,000 $ 6,000 $ 3,600 2-Jan Prepaid Rent Cash $ 3,600 $ 26,400 3-Jan Cash Notes payable (long term) $ 26,400 $ 19,200 4-Jan Equipment Cash $ 19,200 $ 8,000 5-Jan Cash Common Stock $ 8,000 $ 900 6-Jan Supplies Accounts Payable $ 900 $ 800 7-Jan Cash Accounts Receivable $ 800 $ 700 8-Jan Accounts Payable Cash $ 700 $ 11,700 9-Jan Accounts Receivable Service revenue $ 11,700 $ 7,700 10-Jan Cash Service revenue $ 7,700 $ 2,660 16-Jan Salaries & Wages expense Cash $ 2,660 $ 3,900 20-Jan Cash Deferred Revenue $ 3,900 $ 3,600 $ 3,600 25-Jan Cash Accounts Receivable Adjusting entries 31a Utilities expense Accounts Payable $ 900 $ 900 31b $ 1,070 -410+900-240 Supplies expense Supplies $ 1,070 310 $ 2,340 =3,900*60% Deferred Revenue Service revenue $ 2,340 31d $ 110 =26,400*5%*1/12 Interest expense Interest Payable $ 110 31e $ 400 =19,200/4*1/12 Depreciation expense Accumulated Depreciation $ 400 31f $ 2,660 =1,330*2 Salaries & Wages expense Salaries & Wages Payable $ 2,660 318 $ 500 =6,000/12 Insurance expense Prepaid Insurance $ 500 31g $ 300 =3,600/12 Rent expense Prepaid Rent $ 300

Credit Date Credit Date Credit Date Credit Fast Deliveries, Inc. T Accounts Date Debit Date Cash Op bal 11,700 1-Jan 3-Jan 26,400 2-Jan 5-Jan 8,000 4-Jan 7-Jan 800 8-Jan 10-Jan 7,700 16-Jan 20-Jan 3,900 25-Jan 3,600 Debit Date Accounts Receivable 620 7-Jan 11,700 25-Jan Debit Date Prepaid Insurance 6,000 31g 1-Jan Debit Date Supplies 410 900 31b 800 Op bal 3,600 6-Jan 6,000 Op bal 3,600 9-Jan 19,200 700 2,660 500 Bal. Bal. Bal. 240 Bal. 5,500 29,940 Prepaid Rent 3,600 31g 7,920 Equipment 19,200 Accumulated Depreciation 2-Jan 300 4-Jan 31e 400 8-Jan Accounts Payable 700 Op bal 6-Jan 31a 800 900 900 Bal. Bal. 400 1,900 3,300 Deferred Revenue 2,340 25-Jan 19,200 Notes payable (long term) 3-Jan Bal. Salaries & Wages Payable Interest Payable 310 3,900 26,400 310 110 31f 2,660 1,560 Bal. 26,400 Bal. 110 Bal. 2,660 Bal. Common Stock Op bal 5-Jan Retained Earnings Op bal 480 11,450 8,000 Bal. 19,450 480 Bal. Salaries & Wages expense 16-Jan 2,660 31f 2,660 Utilities expense 900 Supplies expense 1,070 Service revenue 9-Jan 10-Jan 31c 31b 11,700 7,700 2,340 21,740 Bal. Bal. Bal. Bal. Interest expense 110 5,320 Insurance expense 500 900 Rent expense 300 1,070 Depreciation expense 400 310 31g Bal. 110 500 Bal. 300 400

Unadjusted TB Debit Credit 29,940 7,920 1,310 6,000 3,600 19,200 1,000 3,900 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 29,940 7,920 240 3,300 5,500 19,200 400 1,900 1,560 2,660 110 26,400 19,450 480 21,740 5,320 900 1,070 400 500 300 110 74,700 74,700 26,400 19,450 480 19,400 2,660 70,630 70,630