Journalizing, Posting, Worksheet, Adjusting, Closing the Financial Statements
Matthews Delivery Service completed the following transactions during its first month of operations for January 2012:
a. Matthews Delivery Service began operations by receiving $6,000 cash and a truck valued at $11,000. The business gave Matthews capital to aquire these assets.
b. Paid $300 cash for supplies.
c. Prepaid insurance, $700.
d. Performed delivery services for a customer and received $800 cash.
e. Completed a large delivery job, billed the customer $1,500, and received a promise to collect the $1,500 within one week.
f. Paid employee salary, $700.
g. Received $12,000 cash for performing delivery services.
h. Collected $600 in advance for delivery service to be performed later.
i. Collected $1,500 cash from a customer on account.
j. Purchased fuel for the truck, paying $200 with a company credit card. (Credit Accounts payable)
k. Performed delivery services on account, $900.
l. Paid office rent, $600. This rent is not paid in advance.
m. Paid $200 on account.
n. Owner withdrew cash of $2,100.
Requirements
1. Record each transaction in the journal. Key each transaction by its letter. Explanations are not required.
2. Post the transactions that you recorded in Requirement 1 in the T-accounts.
Cash
Accounts receivable
Supplies
Prepaid insurance
Delivery truck
Accumulated depreciation
Accounts payable
Salary payable
Unearned service revenue
Matthews, capital
Matthews, drawing
Income summary
Service revenue
Salary expense
Depreciation expense
Insurance expense
Fuel expense
Rent expense
Supplies expense
3. Enter the trial balance in the worksheet for the month ended January 31, 2012. Complete the worksheet using the adjustment data given at January 31.
a. Accrued salary expense, $700.
b. Depreciation expense, $60.
c. Prepaid insurance expired, $250.
d. Supplies on hand, $200.
e. Unearned service revenue earned during January, $500.
4. Prepare Matthews Delivery Service’s income statement and statement of owner’s equity for the month ended January 31, 2012, and the classified balance sheet on that date. On the income statement, list expenses in decreasing order by amount—that is, the largest expense first, the smallest expense last.
5. Journalize and post the adjusting entries beginning with a.
6. Journalize and post the closing entries.
7. Prepare a post-closing trial balance at January 31, 2012.
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