Question

Manning Delivery Service completed the following transactions duringDecember 2018​:

1.	Record each transaction in the journal using the following chart of accounts. Explanations are not required.

Dec. 1 Manning Delivery Service began operations by receiving $15,000 cash and a truck with a fair value of $18,000 from Radley Manning. The business issued Manning capital in exchange for this contribution.

Dec. 1 Paid $900 cash for a six-month insurance policy. The policy begins December 1.

Dec. 4 Paid $800 cash for office supplies.

Dec. 12 Performed delivery services for a customer and received $1,600 cash.

Dec. 15 Completed a large delivery job, billed the customer, $3,500, and received a promise to collect the $3,500 within one week.

Dec. 18 Paid employee salary, $1,800.

Dec. 20 Received $4,000 cash for performing delivery services.

Dec. 22 Collected $1,700 in advance for delivery service to be performed later.

Dec. 25 Collected $3,500 cash from customer on account.

Dec. 27 Purchased fuel for the truck, paying $450 on account. (Credit Accounts Payable)

Dec. 28 Performed delivery services on account, $1,900.

Dec. 29 Paid office rent, $1,700, for the month of December.

Dec. 30 Paid $450 on account.

Dec. 31 Manning withdrew cash of $3,000.

2.	Post the transactions in the​ T-accounts.
3.	Prepare an unadjusted trial balance as of December 31​, 2018.
4.	Prepare a worksheet as of December 31​, 2018.
5.	Journalize the adjusting entries using the following adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the​ T-accounts. Adjustment​ data: a. Accrued Salaries​ Expense, $1,800. b. Depreciation was recorded on the truck using the​ straight-line method. Assume a useful life of five years and a salvage value of $9,000. c. Prepaid Insurance for the month has expired. d. Office Supplies on​ hand, $100. e. Unearned Revenue earned during the​ month, $1,300. f. Accrued Service​ Revenue, $1,350.
6.	Prepare an adjusted trial balance as of December 31​, 2018.
7.	Prepare Manning Delivery​ Service's income statement and statement of​ owner'sequity for the month ended December 31​, 2018​, and the classified balance sheet on that date. On the income​ statement, list expenses in decreasing order by amount—that is, the largest expense​ first, the smallest expense last.
8.	Journalize the closing entries and post to the​ T-accounts.
9.	Prepare a​ post-closing trial balance as of December 31​, 2018.

Answer 1

Calculation Manning Delivery Service Journal entries Date Account 1-Dec Cash Truck Capital Debit $ 15,000 $ 18,000 $ 33,000 $ 900 6 month policy 1-Dec Prepaid Insurance Cash $ 900 $ 800 4-Dec Office Supplies Cash $ 800 $ 1,600 12-Dec Cash Service Revenue $ 1,600 $ 3,500 15-Dec Accounts Receivable Service Revenue $ 3,500 $ 1,800 18-Dec Salaries expense Cash $ 1,800 $ 4,000 20-Dec Cash Service Revenue $ 4,000 $ 1,700 22-Dec Cash Unearned Revenue $ 1,700 $ 3,500 25-Dec Cash Accounts Receivable $ 3,500 $ 450 27-Feb Fuel expenses Accounts Payable $ 450 $ 1,900 28-Dec Accounts Receivable Service Revenue $ 1,900 $ 1,700 29-Dec Rent expense Cash $ 1,700 $ 450 30-Dec Accounts Payable Cash $ 450 $ 3,000 $ 3,000 31-Dec Drawings Cash Adjusting entries Date Account 31-Dec Salaries expense Adj (a) Salaries Payable Credit Calculation Debit $ 1,800 $ 1,800 $ 150 =(18,000-9,000)/5*1/12 31-Dec Depreciation expense- Truck Adj (b) Accumulated Depreciation - Truck $ 150 $ 150 =900/6 31-Dec Insurance expense Adj (c) Prepaid Insurance $ 150 $ 700 =800-100 31-Dec Supplies expense Adj (d) Office Supplies $ 700 $ 1,300 31-Dec Unearned Revenue Adj (e) Service Revenue $ 1,300 $ 1,350 $ 1,350 31-Dec Accounts Receivable Adj (f) Service Revenue Closing entries Date Account 31-Dec Service Revenue Clos. (1) Income Summary Credit Calculation Debit $ 13,650 $ 13,650 $ 6,750 31-Dec Income Summary Clos. (2) Salaries expense Depreciation expense- Truck Insurance expense Fuel expenses Rent expense Supplies expense $ $ $ $ $ $ 3,600 150 150 450 1,700 700 $ 6,900 31-Dec Income Summary Clos. (3) Capital $ 6,900 $ 3,000 31-Dec Capital Clos. (4) Drawings $ 3,000

Credit Credit Date Debit Date Office Supplies 4-Dec $ 800 Adj (d) Date Debit Date Prepaid Insurance 1-Dec $ 900 Adj (c) $ 700 $ 150 Manning Delivery Service T Accounts Date Debit Date Credit Date Debit Date Credit Cash Accounts Receivable 1-Dec $ 15,000 1-Dec $ 900 15-Dec $ 3,500 25-Dec $ 3,500 12-Dec $ 1,600 4-Dec $ 800 28-Dec $ 1,900 20-Dec $ 4,000 18-Dec $ 1,800 Adj (f) $ 1,350 22-Dec $ 1,700 29-Dec $ 1,700 25-Dec $ 3,500 30-Dec $ 450 31-Dec $ 3,000 Bal. Bal. $ 17,150 Truck 1-Dec $ 18,000 Bal. $ 3,250 Accumulated Depreciation - Truck Adj (b) $ 150 Bal. $ 100 Accounts Payable 30-Dec $ 450 27-Feb $ $ 750 Salaries Payable Adj (a) 450 $ 1,800 Bal. $ - $ 1,800 $ 18,000 Unearned Revenue $ 1,300 22-Dec $ 1,700 Bal. $ 150 Capital 1-Dec $ 33,000 $ 3,000 Clos. (3) $ 6,900 Bal. Drawings 31-Dec $ 3,000 Clos. (4) Bal. Income Summary $ 6,750 Clos. (1) $ 6,900 Adj (e) $ 3,000 $ 13,650 Clos. (2) Clos. (3) Clos. (4) Bal. Bal. Salaries expense 18-Dec $ 1,800 Adj (a) $ 1,800 $ 36,900 Bal. $ Depreciation expense- Truck Adj (b) $ 150 Insurance expense $ 150 Adj (c) Bal. $ 400 Service revenue 12-Dec $ 1,600 15-Dec $ 3,500 20-Dec $ 4,000 28-Dec $ 1,900 Adj (e) $ 1,300 $ 13,650 Adj (f) $ 1,350 Clos. (1) Clos. (2) $ 3,600 Clos. (2) $ 150 Clos. (2) $ 150 $ - $ Bal. Bal. $ - Bal. Fuel expense 450 Clos. (2) Bal. Rent expense 29-Dec $ 1,700 Clos. (2) $ Supplies expense $ 700 Clos. (2) 27-Feb $ Adj (d) $ 450 $ 1,700 $ 700 Bal. $ - Bal. $ . Bal. $ .

Adjustments Debit Credit Income Statement Debit Credit Unadjusted TB Debit Credit 17,150 1,900 Adjusted TB Debit Credit 17,150 3,250 Post Closing TB Debit Credit 17,150 3,250 1,350 Balance Sheet Debit Credit 17,150 3,250 100 750 18,000 150 800 100 100 700 150 d C 900 18,000 750 18,000 Manning Delivery Service Account Names Cash Accounts Receivable Office Supplies Prepaid Insurance Truck Accumulated Depreciation - Truck Accounts Payable Salaries Payable Unearned Revenue Capital Drawings Service Revenue 750 18,000 150 b 150 150 1,800 a 1,300 1,700 33,000 1,800 400 33,000 1,800 400 33,000 1,800 400 36,900 3,000 3,000 3,000 11,000 13,650 13,650 1,300 1,350 e f 1,800 1,800 150 150 Salaries expense Depreciation expense- Truck Insurance expense Fuel expenses Rent expense Supplies expense Totals Net Income Totals 450 1,700 3,600 150 150 450 1,700 700 49,000 3,600 150 150 450 1,700 700 6,750 6,900 13,650 700 5,450 45,700 45,700 5,450 49,000 13,650 42,250 39,250 39,250 35,350 6,900 42,250 13,650 42,250

13,650 Manning Delivery Service Income Statement For Month Ended December 31, 2018 Revenues Service Revenue Expenses Salaries expense Rent expense Supplies expense Fuel expenses Depreciation expense- Truck Insurance expense Total Expenses Net Income (Loss) 3,600 1,700 700 450 150 150 6,750 6,900 Statement of Owners Equity For Month Ended December 31, 2018 Capital, December 1, 2018 Investments Net Income Less Drawings Capital, December 31, 2018 33,000 6,900 39,900 (3,000) 36,900

Manning Delivery Service Balance Sheet As of December 31, 2018 Assets Current Assets Cash Liabilities & Owners Equity Current Liabilities 17,150 Accounts Payable 3,250 Salaries Payable 100 Unearned Revenue 750 21,250 Total Current Liabilities Accounts Receivable Office Supplies Prepaid Insurance Total Current Assets 1,800 400 2,200 36,900 Property, Plant & Equipment Truck Accumulated Depreciation - Truck Total Property, Plant & Equipment Owners Equity 18,000 Capital (150) 17,850 Total Assets 39,100 Total Liabilities & Owners Equity 39,100