Homework Answers
Answer:
Income Statement:
| FAST DELIVERIES, INC | |
| Income Statement | |
| For the month ended January 31 | |
| Revenues | |
| Service performed (See working note 5) | $ 21,680.00 |
| Total (a) | $ 21,680.00 |
| Expenses | |
| Salary and Wages Expense (incudes unpaid salaries) | $ 5,080.00 |
| Supplies Expenses(See working note 4) | $ 2,040.00 |
| Interest Expenses((See working note 3) | $ 113.33 |
| Depreciation Expenses(See working note 6) | $ 500.00 |
| Utilities Expenses (Outstanding) | $ 900.00 |
| Insurance Expenses(See working note 1) | $ 425.00 |
| Rent Expenses(See working note 2) | $ 400.00 |
| Total (b) | $ 9,458.33 |
| Net Income (a-b) |
$ 12,221.67 |
Statement of Retained Earnings:
| FAST DELIVERIES, INC | |
| Statement of Retained Earnings | |
| Retained Earnings, Beginning of period | $ 220.00 |
| Add: Net Income | $ 12,221.67 |
| Add: Dividends | $ - |
| Retained Earnings, end of the period | $ 12,441.67 |
Balance Sheet at Jan 31:
| FAST DELIVERIES, INC | |||
| Balance Sheet | |||
| At January 31 | |||
| Assets | Liabilities | ||
| Current Assets | Current Liabilities | ||
| Cash (See ledger) | $ 32,960.00 | Accounts Payable (See ledger) | $ 1,400.00 |
| Accounts Receivable (See ledger) | $ 7,480.00 | Salaries Payable (1270 Multiply 2 employee) | $ 2,540.00 |
| Supplies | $ 210.00 | Interest Payable | $ 113.33 |
| Prepaid Insurance (See W. No. 1) | $ 4,675.00 | Deferred Revenue | $ 1,520.00 |
| Prepaid Rent(See W. No. 2) | $ 4,400.00 | Utility bill payable | $ 900.00 |
| Total Current Liabilities | $ 6,473.33 | ||
| Notes Payable (Long term) | $ 34,800.00 | ||
| Total Liabilities | $ 41,273.33 | ||
| Delivery Expense- $24000 | Common Stock | $ 19,510.00 | |
| Less: Accumulated Depreciaition- $500 | $ 23,500.00 | Retianed Earnings | $ 12,441.67 |
| Total Assets | $ 73,225.00 | Total Liabilities and Stockholders Equity | $ 73,225.00 |
Working Notes:
| Working Notes | |||||
|
1. Calculation of
Insurance expense and Prepaid Insurance Insurance amount paid: $5100 Period: 12 months Expense related to 1 months: $425 ($5100/12 Multiply one month) Prepaid expense: $4675 ( $5100 less $425) |
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2. Calculation of Rent
expense and Prepaid Rent Rent amount paid: $4800 Period: 12 months Expense related to 1 months: $400 ($4800/12 Multiply one month) Prepaid expense: $4400 ( $4800 less $400) |
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3. Calculation of
Interest expense related to Notes payable Loan amount: $34000 Rate of interes: 4% Interest for one month: $113.33 ( $34000 Multiply 4% Multiply One Month and Divide by 12 months) |
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4. Calculation of Supplies
Expenses Supplies beginning balance: $750 Add: Purchase During the year $1500 Less: Closing balance $210 Supplies expenses $2040 |
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5. Calculation of Revenue Performed services on account $11800 Performed services in cash $7600 60% of revenue booked against advance $3800 Multiply 60% $2280 Total Revenue $21680 |
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6. Calculation of Van
Depreciation |
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| Ledgers: | |||||
| Cash | |||||
| Date | Particular | Debit Amount | Date | Particular | Credit Amount |
| Beg. Balance | $ 10,500.00 | ||||
| Jan.3 | Notes Payable | $ 34,800.00 | Jan.1 | Prepaid Insurance | $ 5,100.00 |
| Jan.5 | Common Stock | $ 8,000.00 | Jan.2 | Prepaid Rent | $ 4,800.00 |
| Jan.7 | Cash collected | $ 400.00 | Jan.4 | Delivery Expense | $ 24,000.00 |
| Jan.10 | Cash Sales | $ 7,600.00 | Jan.8 | Accounts payable | $ 500.00 |
| Jan.20 | Advance received | $ 3,800.00 | Jan.16 | Salary Paid | $ 2,540.00 |
| Jan.25 | Account Receivable | $ 4,800.00 | |||
| End Balance | $ 32,960.00 | ||||
| Total | $ 69,900.00 | $ 69,900.00 | |||
| Account Receivable | |||||
| Date | Particular | Debit Amount | Date | Particular | Credit Amount |
| Beg. Balance | $ 880.00 | ||||
| Jan.9 | Services performed | $ 11,800.00 | Jan.7 | Cash collected | $ 400.00 |
| Jan.25 | Advance Collected | $ 4,800.00 | |||
| End Balance | $ 7,480.00 | ||||
| Total | $ 12,680.00 | $ 12,680.00 | |||
| Accounts Payable | |||||
| Date | Particular | Debit Amount |
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