Question

Adjusting journal

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: FAST DELIVERIES, INC. Balance Sheet at January 1 Assets: Liabilities: Cash $10,500 Accounts Payable $ 400 Accounts Receivable Stockholders' Equity! Supplies Common Stock 11,510 Retained Earnings 220 Total Assets $12,130 Total Liabilities and Stockholders' Equity $12,130 880 750 Two employees have been hired, at a monthly salary of $2,540 each. The following transactions occurred during January of the current year ch 2 2 2 January 2 2 $5,100 is paid for 12 months! Insurance starting January 1. (Record as an asset.) $4,800 is paid for 12 months of rent beginning January 1. (Record as an asset.) TDI borrows $34,800 cash from First State Bank at 4% annual interest; this note is payable in two years. A delivery van is purchased using cash. Including tax, the total cost was $24,000. Stockholders contribute $8,000 of additional cash to FDI for its common stock. 2 5

Answer 1

	Account Titles	Debit	Credit
31a	Utilities Expense	$             900
	Accounts Payable		$             900
31b	Supplies Expense	$          2,040		=750+1500-210
	Supplies		$          2,040
31c	Unearned Revenue	$          2,280		=3800*60%
	Service Revenue		$          2,280
31d	Interest Expense	$             116		=34800*4%*1/12
	Interest Payable		$             116
31e	Depreciation Expense	$             500		=24000/48
	Accumulated Depreciation		$             500
31f	Salaries and Wages Expense	$          2,540		=1270*2
	Salaries and Wages Payable		$          2,540
31g(1)	Insurance Expense	$             425		=5100/12
	Prepaid Insurance		$             425
31g(2)	Rent Expense	$             400		=4800/12
	Prepaid Rent		$             400

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