Question

Francine’s Fast Deliveries, Inc. (FFD) was organized in December of 2011. It had limited activity in 2011. The resulting balance sheet at the beginning of 2012 is provided below:

Francine’s Fast Deliveries, Inc. Balance Sheet at January 1, 2012
Assets:				Liabilities:
Cash	$	875		Accounts Payable	$	250
Accounts Receivable		450		Stockholders’ Equity:
Supplies		250		Contributed Capital	$	1,000
				Retained Earnings		325
Total Assets	$	1,575		Total Liabilities & Stk. Equity	$	1,575

January Transactions for Francine’s Fast Deliveries, Inc. (FFD)

Date
1	Owners invest $18,000 of additional cash in the business.
2a	Supplies are purchased for $550 on account.
2b	Insurance is paid for 12 months beginning January 1: $6,060 (Record as an asset)
2c	Rent is paid for 3 months beginning in January: $2,550 (Record as an asset)
2d	Two employees are hired. Each employee will be paid $870 per month
3	FFD borrows $21,000 from 1st State Bank at 6% annual interest.
6	A delivery van is purchased for cash. Including tax the total cost was $28,800. It will be used for 4 years and will be depreciated monthly using straight-line with no salvage value. A full month of depreciation will be charged in January.
7	$315 of the receivables from December’s sales are collected.
8	$200 of the accounts payable from December are paid.
9	Performed services for customers on account. Mailed invoices totaling $8,200.
10	Services are performed for cash customers: $5,740.
16	Wages for the first half of the month are paid on January 16: $870.
20	The company receives $2,150 from a customer for an advance order for services to be provided in January and February.
25	Collections from customers on account (see January 9 transaction): $3,280
30a	The last 2 weeks wages earned by employees are $435 per employee and will be paid on February 3.
30b	A $545 utility bill for January arrived. It is due on February 15.

Additional Information for adjusting entries at January 31:

a.	Supplies on hand on January 31 total $160.
b.	The company completed 60% of the deliveries for the customer who paid in advance on January 20.
c.	Interest is accrued for the bank loan. (Assume a full month for the 1st State Bank loan.)
d.	Record January depreciation.
e.	Adjust the prepaid asset (Rent and Insurance) accounts as needed.

2.	Post the beginning balances and January transactions to the T-Accounts.
	3. Prepare an unadjusted trial balance using the T-Account balances. 4.-5. Analyze the accounts and prepare the adjusting entries required using the additional information provided. Post the adjusting entry activity to the T-Accounts in Requirement #2. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
6.	Prepare the adjusted trial balance, using the revised set of t-account balances
7.	Prepare end-of-January financial statements. (Balance Sheet only, items to be deducted must be indicated with a negative amount.)

Answer 1