Question

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: see Assets: Cash Accounts Receivable Supplies $10,000 740 770 FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity Common Stock Retained Earnings Total liabilities and Stockholders' Equity 11,410 500 $12,410 Total Assets $12,410 Two employees have been hired at a monthly salary of $2.900 each. The following transactions occurred during January of the current year Ch 2 2 2 January 1 2 5 NNNN $4,500 is paid for 12 months' Insurance starting January 1. (Record as an asset.) $3,600 is paid for 12 months of rent beginning January 1. (Record as an asset.) FDI borrows $28,800 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 $19,200. Stockholders contribute 55,000 of additional cash to FDI for its common stock. Additional supplies costing $1,100 are purchased on account and received 5600 of accounts receivable arising from last year's December sales are collected $500 of accounts payable from December of last year are paid Performed services for customers on account. Sent invoices totaling $19,500. 57,800 of services are performed for customers who paid Imediately in cash. $2,900 of salaries are paid for the first half of the month FOI receives 53,900 cash from a customer for an advance order for services to be provided 7 8 9 10 88

Answer 1

1. Ledgers -

Jan 1 Accounts Receivable Beg Bal.$ 740 $ 600 Jan 9 $ 10,500 $ 3,600 Jan 7 Jan 25 Jan 2 Jan 4 Cash Beg Bal. $ 10,900 $ 4,500 Jan 3 $ 28,800 $ 3,600 Jan 5 $ 5,000 $ 19,200 Jan 7 $ 600 $ 500 Jan 10 $ 7,800 $ 2,900 Jan 20 $ 3,900 Jan 25 $ 3,600 Jan 8 End Bal. $ 7,040 Jan 16 Prepaid Insurance Beg Bal. End Bal. $ 29,900 Jan 1 $ 4,500 $ 375 31g. $ 60,600 $ 60,600 $ End Bal. $ 4,125 Supplies 770 $ 1,100 1,660 31b. Beg Bal.$ Jan 6 $ Equipment Beg Bal. Jan 4 $ 19,200 End Bal. $ 210 End Bal.$ 19,200 Prepaid Rent Beg Bal. Jan 2 $ 3,600 $ 300 31g. Beg Bal Jan 8 Accounts Payable $ 500 $ 500 $ 1,100 $ 1,200 Jan 6 End Bal. $ 3,300 31a. End Bal. $ 2,300 Accumulated Depreciation Beg Bal. $ 400 31e. Notes Payable (Long term) $ 28,800 Beg Bal. Jan 3 End Bal. $ 400 End Bal. $ 28,800 Beg Bal. Deferred Revenue $ 3,900 $ 2,340 Jan 20 31c. Salaries and Wages Payable Beg Bal. $ 2,900 31f. End Bal. $ 1,560 End Bal. $ 2,900 Interest Payable $ 96 Beg Bal. 31d. Retained Earnings $ 500 Beg Bal End Bal. $ 96 End Bal. $ 500 Beg Bal. Common Stock $ 11,410 $ 5,000 Jan 5 Salaries and Wages Expense Beg Bal. Jan 16 $ 2,900 31f. $ 2,900 End Bal. $ 16,410 End Bal.$ 5,800 Beg Bal. Jan 9 Service Revenue $ 10,500 $ 7,800 $ 2,340 Jan 10 31c. Supplies Expense Beg Bal. 31b. End Bal. $ 20,640 $ 1,660 End Bal. $ 1,660 Utilities Expense Beg Bal. 31a. $ 1,200 Insurance Expenses Beg Bal. 31g. End Bal. $ 1,200 $ 375 End Bal. $ 375 Interest Expense Beg Bal. 31d. $ 96 Depreciation Expenses Beg Bal. End Bal. $ 96 31e. $ 400 End Bal. $ 400 Rent Expenses Beg Bal. 31g. $ 300 End Bal. $ 300

2. Unadjusted Trial Balance -

FAST DELIVERIES, INC. Unadjusted Trial Balance As on January 31 Cash $ 29,900 Accounts Receivable $ 7,040 Prepaid Insurance $ 4,500 Supplies $ 1,870 Prepaid Rent $ 3,600 Equipment $ 19,200 Accounts Payable Deferred Revenue Notes Payable (Long term) Common Stock Retained Earnings Service Revenue Salaries and Wages Expense $ 2,900 $ 1,100 $ 3,900 $ 28,800 $ 16,410 $ 500 $ 18,300 Total $ 69,010 $ 69,010

3. Adjusted Trial Balance -

FAST DELIVERIES, INC. Adjusted Trial Balance As on January 31 Cash $ 29,900 Accounts Receivable $ 7,040 Prepaid Insurance $ 4,125 Supplies $ 210 Prepaid Rent $ 3,300 Equipment $ 19,200 Accumulated Depreciation Accounts Payable Deferred Revenue Salaries and Wages Payable Interest Payable Notes Payable (Long term) Common Stock Retained Earnings Service Revenue Salaries and Wages Expense $ 5,800 Supplies Expense $ 1,660 Utilities Expense $ 1,200 Insurance Expenses $ 375 Interest Expense $ 96 Depreciation Expenses $ 400 Rent Expenses $ 300 $ 400 $ 2,300 $ 1,560 $ 2,900 $ 96 $ 28,800 $ 16,410 $ 500 $ 20,640 Total $ 73,606 $ 73,606
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