The unadjusted trial balance of Doc's Delivery Service is as follows:

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1. Enter the unadjusted trial balance on a work sheet form and complete the work sheet using the information that follows.

a. Expired insurance on the office equipment, \(\$ 165\), and on the delivery equipment, \(\$ 2,665\).

b. An inventory showed \(\$ 180\) of unused office supplies on hand.

c. Estimated depreciation on the office equipment, \(\$ 435\), and \((d)\) on the delivery equipment, \(\$ 3,495\).

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 December 31, 1990, the December rent had not been paid.

f. The delivery service has contracts with three stores for the delivery of packages on a fixed-fee basis. 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 the contracts shows that \(\$ 480\) of the \(\$ 825\) paid was earned by the end of the accounting period. The third store's contract provides for a \(\$ 380\) monthly fee to be paid at the end of each month's service. One half of a month's revenue has accrued on this contract but it is unrecorded.
g. A \(\$ 125\) bill for repairs to a delivery truck during December arrived in the mail after the trial balance was prepared. It is unpaid and unrecorded.
\(h\). Office salaries, \(\$ 60\), and delivery wages, \(\$ 145\), 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.
3. Journalize adjusting and closing entries.
4. Post the adjusting and closing entries to the accounts and prepare a post-closing trial balance. (If the working papers are not being used, omit this requirement.)

Transcribed Image Text:

Unadjusted Trial Balance DOC'S DELIVERY SERVICE December 31, 1990 Cash Accounts receivable Prepaid insurance $ 785 1,000 3,415 Office supplies 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 Mark Welby, withdrawals 18,000 Delivery service revenue. Rent expense.. Telephone expense 62,325 3,750 515 Office salaries expense. 15,090 Delivery wages expense 30,480 Gas, oil, and repairs expense 4,770 Totals $104,420 $104,420