1- Arab Delivery Service, Inc. completed the following transactions during January, 2019:

1. Shareholders invested in the business $30,000 cash and a delivery truck valued at $36,000 in exchange for common stock.

2. Purchased supplies for $1,500 cash.

3. Paid $2,750 for a one-year insurance policy, effective January1.

4. Performed delivery services for a customer and received $2,000 cash.

5. Completed a large delivery job for a customer on account for $7,500.

6. Paid $5,000 for employee salaries.

7. Performed delivery services for customers and received $55,000 cash.

8. Collected $2,500 in advance for delivery service to be performed later.

9. Collected $3,500 cash from a customer on account.

10. Purchased fuel for the truck, paying $1,800 with a company credit card (Credit accounts payable).

11. Performed delivery services on account, $4,750.

12. Paid office rent $1,200.

13. Paid $1,000 for accounts payable.

14. Paid cash dividends of $9,000.

Requirements:

Record each transaction in the journal. Key each transaction by its letter (Explanations are not required). [3.5 marks]

2- On August 1, Youssef established Wolf Company that provides driving lessons, by investing $90,000 cash in the business. Following are the assets and liabilities of the company on August 31, 2019, and the revenues and expenses for the month of August.

Cash $ 11,200- Notes Payable $60,000 -Accounts Receivable 14,400- Rent Expense 2,400 - Equipment 128,000- Repair Expense 800- Lesson Revenue 15,000 -Fuel

Expense 5,000 -Advertising Expense 1,000- Insurance Expense 800- Accounts

Payable 1,600

Youssef did not make any other investment in August, but he withdrew $3,000 in cash for personal use.

Required

Prepare income statement for the month ended August 31, 2019