The accounts of Doc's Delivery Service, showing balances as of the end of its annual accounting period, appear in the booklet of working papers that accompanies this text; and the unadjusted trial balance of the accounts is reproduced on a work sheet form there. The unadjusted trial balance of Doc's Delivery Service is as follows:

\section*{Required}
1. Enter the unadjusted trial balance on a work sheet form and complete the work sheet using the information that follows.

a. Insurance expired on the office equipment, \(\$ 150\), and on the delivery equipment, \(\$ 2,835\)

b. An inventory showed \(\$ 165\) of unused office supplies on hand.

c. Estimated depreciation on the office equipment, \(\$ 450\).

d. Estimated depreciation on the delivery equipment, \(\$ 3,625\).

e. In December 1989, the company had prepaid the January 1990 rent for garage and office space occupied by the delivery service. This amount appears as the balance of the Prepaid Rent account. Rents for February through November were paid each month and debited to the Rent Expense account. As of the trial balance date, the December rent had not been paid.

f. Three stores signed contracts with the delivery service in which they agreed to pay a fixed fee for the delivery of packages. Two of the stores made advance payments on their contracts, and the amounts paid were credited to the Unearned Delivery Service Revenue account. An examination of their contracts shows \(\$ 420\) of the \(\$ 825\) paid was earned by the end of the accounting period. The third store's contract provides for a \(\$ 300\) monthly fee to be paid at the end of each month's service. It was signed on December 15 , and one half of a month's revenue has accrued but is unrecorded.
g. A \(\$ 55\) December telephone bill and a \(\$ 90\) bill for repairs to a motorcycle used in the business arrived in the mail on December 31 . Neither bill was paid or recorded before the trial balance was prepared.
\(h\). Office salaries, \(\$ 120\), and delivery wages, \(\$ 265\), have accrued but are unpaid and unrecorded.
2. Prepare an income statement, a statement of changes in owner's equity, and a classified balance sheet. Mr. Welby did not make additional investments in the business during 1990 .
3. Journalize adjusting and closing entries.
4. Post the adjusting and closing entries to the accounts and prepare a post-closing trial balance. (If you are not using the working papers, omit this requirement.)

Transcribed Image Text:

DOC'S DELIVERY SERVICE Unadjusted Trial Balance December 31, 1990 Cash. Accounts receivable Prepaid insurance Office supplies SA 785 1,000 3,400 365 Prepaid rent. 375 Office equipment 3,690 Accumulated depreciation, office equipment $ 855 Delivery equipment. 22,185 Accumulated depreciation, delivery equipment 4,725 Accounts payable 1,335 Unearned delivery service revenue 825 Mark Welby, capital. 34,355 Delivery service revenue Mark Welby, withdrawals Rent expense Telephone expense 18,000 63,085 4,500 540 Office salaries expense. 15,090 Delivery wages expense 30,480 Gas, oil, and repairs expense 4,770 Totals $105,180 $105,180