Question

Case: In 2017, Luke Whitney founded Luke's Delivery Service and he come to your group for advice. He need to know how much net income the business earned during the first month of operation but he has no one currently to assist in providing him with the required information. The company completed the following transactions during its first month of operations for January 2017 A. Luke's Delivery Service began operations by receiving $6,000 cash and a truck valued at $11,000. The business gave Luke capital to acquire these assets B. Paid $300 cash for supplies C. Prepaid insurance, 5700 D. Performed delivery services for a customer and received $800 cash. E. Completed a large delivery job, billed the customer $1,500, and received a promise to collect the $1,500 within one week F. Paid employee salary, $700 G. Received $12,000 cash for performing delivery services H. Collected $600 in advance for delivery service to be performed later 1. Collected $1,500 cash from a customer on account J. Purchased fuel for the truck, paying $800 with a company credit card. (Credit Accounts payable) K. Performed delivery services on account, 5900 L. Paid office rent, $600. This rent is not paid in advance M. Paid $200 on account N. Owner withdrew cash of $2.100.

Answer 1

Luke's Delivery Service Req 1 Journal entries Date Account A Cash Delivery Truck Luke's, Capital Credit Debit $ 6,000 $ 11,000 $ 17,000 B $ 300 Supplies Cash $ 300 $ 700 Prepaid Insurance Cash $ 700 $ 800 Cash Service Revenue $ 800 E $ 1,500 Accounts Receivable Service Revenue $ 1,500 $ 700 Salaries expense Cash $ 700 Cash $ 12,000 Service Revenue $ 12,000 $ 600 Cash Unearned Service Revenue $ 600 $ 1,500 Cash Accounts Receivable $ 1,500 $ 800 Fuel expenses Accounts Payable $ 800 к $ 900 Accounts Receivable Service Revenue $ 900 $ 600 Rent expense Cash $ 600 $ 200 Accounts Payable Cash $ 200 N $ 2,100 Luke's, Drawings Cash $ 2,100

Credit Date Date Credit Date Credit Luke's Delivery Service Req 2, 4b, 6b T Accounts Date Debit Date Cash $ 6,000 $ 800 C $ 12,000 $ 600 $ 1,500 M Debit Date Credit Accounts Receivable $ 1,500 $ 1,500 $ 900 Debit Date Supplies $ 300 R Debit Date Prepaid Insurance $ 700Q C $ 100 B $ 250 OUI- $ $ $ $ $ $ 700 E 300 K 700 600 200 2,100 Bal. Bal. Bal. Bal. Bal. $ 16,300 Delivery Truck $ 11,000 $ 900 Accumulated Depreciation $ $ 200 Accounts Payable $ 200 $ 450 Salaries Payable A 60 M $ 800 $ 700 Bal. $ 60 $ 600 $ 700 $ 11,000 Unearned Service Revenue $ 500 H $ Bal. Luke's, Capital Bal. Luke's, Drawings $ 2,100 Clos. (4) Bal. Income Summary $ 3,210 Clos. (1) $ 12,490 S 600 N $ 2,100 $ 15,700 $ 17,000 $12,490 Clos. (2) Clos. (3) Clos. (4) $ 2,100 Clos. (3) Bal. $ 100 $ 27,390 Bal. Bal. $ - Service revenue Bal. Salaries expense $ 700 $ 700 $ - Depreciation expense $ 60 Insurance expense $ 250 F 0 $ 800 $ 1,500 $ 12,000 $ 900 $ 500 Clos. (1) $ 15,700 Clos. (2) $ 1,400 Clos. (2) $ 60 Clos. (2) $ 250 $ Bal. Bal. Bal. Bal. Fuel expense 800 Clos. (2) $ - Rent expense $ 600 Clos. (2) $ . Supplies expense $ 100 Clos. (2) J $ $ 800 $ 600 $ 100 Bal. $ Bal. $ Bal. $ .

Req3 Unadjusted TB Debit Credit 16,300 900 300 700 11,000 600 Luke's Delivery Service Account Names Cash Accounts Receivable Supplies Prepaid Insurance Delivery Truck Accumulated Depreciation Accounts Payable Salaries Payable Unearned Service Revenue Luke's, Capital Luke's, Drawings Service Revenue Salaries expense Depreciation expense Insurance expense Fuel expenses Rent expense Supplies expense Totals 600 17,000 2,100 15,200 700 800 600 33,400 33,400

Req 4a Adjusting entries Date Account o Salaries expense Salaries Payable Credit Calculation Debit $ 700 $ 700 $ 60 Depreciation expense Accumulated Depreciation $ 60 $ 250 Insurance expense Prepaid Insurance $ 250 R $ 100 =300-200 Supplies expense Supplies $ 100 S $ 500 Unearned Service Revenue Service Revenue $ 500

Luke's Delivery Service Account Names Cash Accounts Receivable Supplies Prepaid Insurance Delivery Truck Accumulated Depreciation Accounts Payable Salaries Payable Unearned Service Revenue Luke's, Capital Luke's, Drawings Service Revenue Salaries expense Depreciation expense Insurance expense Fuel expenses Rent expense Supplies expense Totals Req5 Adjusted TB Debit Credit 16,300 900 200 450 11,000 60 600 700 100 17,000 2,100 15,700 1,400 60 250 800 600 100 34,160 34,160

15,700 Luke's Delivery Service Income Statement For Month Ended January 31, 2017 Revenues Service Revenue Expenses Salaries expense Rent expense Supplies expense Fuel expenses Depreciation expense Insurance expense Total Expenses Net Income (Loss) 1,400 600 100 800 60 250 3,210 12,490 Statement of Owners Equity For Month Ended January 31, 2017 Capital, December 1, 2018 Investments Net Income Less Drawings Capital, December 31, 2018 17,000 12,490 29,490 (2,100) 27,390

Luke's Delivery Service Balance Sheet As of January 31, 2017 Assets Current Assets Cash Accounts Receivable Supplies Prepaid Insurance Total Current Assets Liabilities & Owners Equity Current Liabilities 16,300 Accounts Payable 900 Salaries Payable 200 Unearned Service Revenue 450 17,850 Total Current Liabilities 600 700 100 1,400 27,390 Property, Plant & Equipment Delivery Truck Accumulated Depreciation Total Property, Plant & Equipment Owners Equity 11,000 Capital (60) 10,940 Total Assets 28,790 Total Liabilities & Owners Equity 28,790

Req 6a Closing entries Date Account 31-Dec Service Revenue Clos. (1) Income Summary Credit Debit $ 15,700 $ 15,700 $ 3,210 31-Dec Income Summary Clos. (2) Salaries expense Depreciation expense Insurance expense Fuel expenses Rent expense Supplies expense $ $ $ $ $ $ 1,400 60 250 800 600 100 $ 12,490 31-Dec Income Summary Clos. (3) Luke's, Capital $ 12,490 $ 2,100 31-Dec Luke's, Capital Clos. (4) Luke's, Drawings $ 2,100

Luke's Delivery Service Account Names Cash Accounts Receivable Supplies Prepaid Insurance Delivery Truck Accumulated Depreciation Accounts Payable Salaries Payable Unearned Service Revenue Luke's, Capital Totals Reg 7 Post Closing TB Debit Credit 16,300 900 200 450 11,000 60 600 700 100 27,390 28,850 28,850