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: Cash Accounts Receivable Supplies FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity! Common Stock Retained Earnings Total Liabilities and Stockholders' Equity $12,600 600 720 $ 700 Total Assets $13,920 11,900 1,320 $13,920 Two employees have been hired, at a monthly salary of $2.960 each. The following transactions occurred during January of the current year.

Answer 1

Fast Deliveries, Inc. Journal entries Date Account 1-Jan Prepaid Insurance Cash Credit Debit $ 6,000 $ 6,000 $ 4,800 2-Jan Prepaid Rent Cash $ 4,800 $ 30,000 3-Jan Cash Notes payable (long term) $ 30,000 $ 28,800 4-Jan Equipment Cash $ 28,800 $ 4,000 5-Jan Cash Common Stock $ 4,000 $ 1,400 6-Jan Supplies Accounts Payable $ 1,400 $ 700 7-Jan Cash Accounts Receivable $ $ 700 $ 300 8-Jan Accounts Payable Cash $ 300 $ 10,600 9-Jan Accounts Receivable Service revenue $ 10,600 $ 7,400 10-Jan Cash Service revenue $ 7,400 16-Jan Salaries & Wages expense Cash $ 2,960 $ 2,960 $ 3,700 20-Jan Cash Deferred Revenue $ 3,700 $ 3,500 25-Jan Cash Accounts Receivable $ $ 3,500

Credit Calculation Adjusting entries Date Account 31a Utilities expense Accounts Payable Debit $ 1,100 $ 1,100 31b $ 1,840 720+1400-280 Supplies expense Supplies $ 1,840 31c $ 2,220 3700*60% Deferred Revenue Service revenue $ 2,220 31d $ 30000*5%*1/12 Interest expense Interest Payable $ 125 31e $ 600 28800/4 yrs*1/12 Depreciation expense Accumulated Depreciation $ 600 31f $ 2,960 1480*2 employees Salaries & Wages expense Salaries & Wages Payable $ 2,960 31g $ 500 6000/12 months Insurance expense Prepaid Insurance $ 500 31g $ 400 4800/12 months Rent expense Prepaid Rent $ 400

Credit Date Credit Date Credit Date Credit Fast Deliveries, Inc. T Accounts Date Debit Date Cash Op bal 12,600 1-Jan 3-Jan 30,000 2-Jan 5-Jan 4,000 4-Jan 7-Jan 700 8-Jan 10-Jan 7,400 16-Jan 20-Jan 3,700 25-Jan 3,500 Debit Date Accounts Receivable 600 7-Jan 10,600 25-Jan Debit Date Supplies 720 1,400 Debit Date Prepaid Insurance 6,000 31g 1-Jan 700 Op bal 3,500 6-Jan 500 6,000 Op bal 4,800 9-Jan 28,800 300 2,960 31b 1,840 Bal. Bal. Bal. Bal. 19,040 Prepaid Rent 4,800 31g 7,000 Equipment 28,800 280 Accumulated Depreciation 31e 5,500 Accounts Payable 300 Op bal 6-Jan 2-Jan 400 4-Jan 600 8-Jan 700 1,400 1,100 31a Bal. Bal. 28,800 600 2,900 4,400 Deferred Revenue 2,220 25-Jan Notes payable (long term) 3-Jan Bal. Interest Payable 31d Bal. Salaries & Wages Payable 311 31c 3,700 30,000 125 2,960 1,480 Bal. 30,000 Bal. 125 Bal. 2,960 Retained Earnings Bal. Common Stock Op bal 5-Jan Op bal 1,320 11,900 4,000 1,320 Bal. Service revenue 9-Jan 15,900 Bal. Salaries & Wages expense 10,600 16-Jan 2,960 7,40031f 2,960 2,220 Utilities expense 1,100 Supplies expense 1,840 31a 31b 10-Jan 310 20,220 Bal. Bal. Bal. Bal. Interest expense 125 5,920 Insurance expense 500 1,100 Rent expense 400 1,840 Depreciation expense 600 31d 31g 31g 31e Bal. 125 Bal. 500 Bal. 400 Bal. 600

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 19,040 7,000 280 4,400 5,500 28,800 600 2,900 1,480 2,960 125 30,000 15,900 1,320 20,220 5,920 1,100 1,840 600 500 400 125 75,505 75,505