The chart of accounts of Angel’s Delivery Service of Flin Flon includes the following: Cash, 111; Accounts Receivable, 112; Office Equipment, 121; Delivery Trucks, 122; Accounts Payable, 211; Alice Angel, Capital, 311; Alice Angel, Withdrawals, 312; Delivery Fees Earned, 411; Advertising Expense, 511; Gas Expense, 512; Salaries Expense, 513; and Telephone Expense, 514. The following transactions resulted from Angel’s Delivery Service during the month of March 2013:
A. Alice invested $40,000 in the business from her personal savings account.
B. Bought delivery trucks on account, $25,000.
C. Advertising bill was received but not yet paid, $800.
D. Bought office equipment for cash, $2,500.
E. Received cash for delivery services rendered, $13,000.
F. Paid salaries expense, $1,850.
G. Paid gas expense for company trucks, $750.
H. Billed customers for delivery services rendered, $5,500.
I. Paid telephone bill, $400.
J. Received $1,600 as partial payment of transaction H.
K. Alice paid her home telephone bill with a company cheque, $88.
As Alice’s newly employed accountant, you must:
1. Setup T accounts in a ledger.
2. Record transactions in the T accounts. (Place the letter of the transaction next to the entry.)
3. Foot the T accounts where appropriate.
4. Prepare a trial balance at the end of March 2013.
5. Prepare from the trial balance, in proper form.
a. An income statement for the month of March.
b. A statement of owner’s equity for the month ended March 31.
c. A balance sheet as of March 31, 2013.