6 Part 6 of 6 Fast Deliveries, Incorporated (FDI), was organized in December last year and had limited activity last year. The resulting balance sheet at the beginning of the current year is provided below: FAST DELIVERIES, INCORPORATED Balance Sheet at January 1 Liabilities: 3 points eBook Assets: Cash Accounts Payable $ 500 12,500 Accounts Receivable Supplies 680 Stockholders' Equity: 610 Common Stock 11,610 Retained Earnings 1,680 $ Total Assets 13,790 Total Liabilities and Stockholders' Equity $ 13,790 Print Two employees have been hired, at a monthly salary of $2,320 each. The following transactions occurred during January of the current year. January 1 $6,000 is paid for 12 months' insurance starting January 1. (Record as an asset.) FDI borrows $34,800 cash from First State Bank at 6% annual interest; this note is payable in two years. A delivery van is purchased using cash. Including tax, the total cost was $19,200. Stockholders contribute $7,000 of additional cash to FDI for its common stock. Additional supplies costing $1,500 are purchased on account and received. Reference 2 $4,800 is paid for 12 months of rent beginning January 1. (Record as an asset.) 3 4 5 6 7 8 9 10 16 20 25 $800 of accounts receivable arising from last year's December sales are collected. $400 of accounts payable from December of last year are paid. Performed services for customers on account. Sent invoices totaling $11,900. $8,000 of services are performed for customers who paid immediately in cash. $2,320 of salaries are paid for the first half of the month. FDI receives $4,000 cash from a customer for an advance order for services to be provided later in January and in February. $4,600 is collected from customers on account (see January 9 transaction). January Additional information for adjusting entries: 31a. A $800 bill arrives for January utility services. Payment is due February 15. 31b. 31c. 31d. 31e. 31f. 31g. Supplies on hand on January 31 are counted and determined to have cost $220. As of January 31, FDI had completed 60% of the deliveries for the customer who paid in advance on January 20. Accrue one month of interest on the bank loan. Yearly interest is determined by multiplying the amount borrowed by the annual interest rate (expressed as 0.06). For convenience, calculate January interest as one-twelfth of the annual interest. Assume the van will be used for 4 years, after which it will have no value. Thus, each year, one-fourth of the van's benefits will be used up, which implies annual depreciation equal to one-fourth of the van's total cost. Record depreciation for the month of January, equal to one-twelfth of the annual depreciation expense. Salaries earned by employees for the period from January 16 to 31 are $1,160 per employee and will be paid on February 3. Adjust the prepaid asset accounts (for rent and insurance) as needed. Required: 6-a. Prepare an income statement. 6-b. Prepare the statement of retained earnings. 6-c. Prepare the balance sheet.