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: Assets: Cash Accounts Receivable Supplies 500 FAST DELIVERIES, INC. Balance sheet at January 1 Liabilities: $10,900 Accounts Payable 740 Stockholders' Equity 770 Common Stock Retained Earnings $12,410 Total Liabilities and stockholders' Equity Total Assets 11,410 500 $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 3 4 5 6 7 2. 2 2 2. 2 3 3 3 3 $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 41 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 $5,000 of additional cash to YDI for its common stock. Additional supplies conting $1,100 are purchased on account and received. $600 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 $10,500. $7,800 of services are performed for customers who paid immediately in cash. $2,900 of salaries are paid for the first half of the month. FDI receives $3,900 cash from a customer for an advance order for services to be provided later in January and in February $3,600 is collected from customers on account (see January 9 transaction). 10 16 20 3 25

Answer 1

	Debit	Credit
Cash
Beg Balance	10900
Prepaid Insurance		4500
Prepaid rent		3600
Note Payable	28800
Delivery Van		19200
Additional Paid in capital	5000
Accounts receivable	600
Accounts payable		500
Sales	7800
Salaries		2900
Unearned revenue	3900
Accounts receivable	3600
Total	60600	30700
Balance		29900
Total	60600	60600
Accounts Receivable
Beg Balance	740
Cash		600
Sales	10500
Cash		3600
Total	11240	4200
Balance		7040
Total	11240	11240
Supplies
Beg Balance	770
Accounts payable	1100
Supplies expense		1660
Total	1870	1660
Balance		210
Total	1870	1870
Accounts payable
Beg Balance		500
Supplies		1100
Cash	500
Total	500	1600
Balance	1100
Total	1600	1600
Common Stock
Beg Balance		11410
Total	0	11410
Balance	11410
Total	11410	11410
Retained earnings
Beg Balance		500
Total	0	500
Balance	500
Total	500	500
Long term note payable
Beg Balance	0	0
Cash		28800
Total	0	28800
Balance	28800
Total	28800	28800
Additional Paid in capital
Beg Balance	0	0
Cash		5000
Total	0	5000
Balance	5000
Total	5000	5000
Accrued expenses
Beg Balance		0
Utility bills expense		1200
Total	0	1200
Balance	1200
Total	1200	1200
Accrued interest on note payable
Beg Balance		0
Interest expense		96
Total	0	96
Balance	96
Total	96	96
Accumulated depreciation on delivery Van
Beg Balance		0
Depreciation expense		400
Total	0	400
Balance	400
Total	400	400

	Debit	Credit
Salaries
Beg Balance	0
Salaries payable	5800
Total	5800	0
Balance		5800
Total	5800	5800
Salaries payable
Beg Balance	0
Salaries expense		5800
Cash	2900
Total	2900	5800
Balance	2900
Total	5800	5800
Prepaid Insurance
Beg Balance	0
Cash	4500
Current month's insurance		375
Total	4500	375
Balance		4125
Total	4500	4500
Insurance
Beg Balance	0
Prepaid Insurance	375
Total	375	0
Balance		375
Total	375	375
Prepaid Rent
Beg Balance	0
Prepaid rent	3600
Current month's rent		300
Total	3600	300
Balance		3300
Total	3600	3600
Rent expense
Beg Balance	0
Prepaid rent	300
Total	300	0
Balance		300
Total	300	300
Delivery Van
Beg Balance	0
Cash	19200
Total	19200	0
Balance		19200
Total	19200	19200
Sales
Beg Balance		0
Accounts receivable		10500
Cash		7800
unearned revenue		2160
Total	0	20460
Balance	20460
Total	20460	20460
Unearned revenue
Beg balance		0
Cash		3900
Sales	2160
Total	2160	3900
Balance	1740
Total	3900	3900
Utility bills
Beg Balance	0
Accrued expenses	1200
Total	1200	0
Balance		1200
Total	1200	1200
Supplies expense
Beg Balance	0
Supplies	1660
Total	1660	0
Balance		1660
Total	1660	1660
Interest expense
Beg Balance	0
Accrued interest	96
Total	96	0
Balance		96
Total	96	96
Depreciation expense
Beg Balance	0
Accumulated depreciation	400
Total	400	0
Balance		400
Total	400	400T

Trail Balance

Particulars	Debit	Credit
Cash	29900
Accounts receivable	7040
Supplies	210
Accounts payable		1100
Common Stock		11410
Retained earnings		500
Additional paid in capital		5000
Long term note payable		28800
Accrued expense		1200
Accrued interest		96
Accumulated depreciation		400
Salaries	5800
Salaries payable		2900
Prepaid insurance	4125
Prepaid rent	3300
Insurance expense	375
Rent expense	300
delivery Van	19200
Sales		20460
Unearned revenue		1740
Utility Bills	1200
Supply expense	1660
Interest expense	96
Depreciation	400
	73606	73606