Adjusting Trial Balance

Daily Driver

DAILY DRIVER, INC. Unadjusted Trial Balance At December 31 \begin{tabular}{lrr|} \hline Account Name & Debit & Credit \\ \hline Cash & 1,000 & \\ \hline Supplies & 50 & \\ \hline Prepaid Insurance & 1,200 & \\ \hline Equipment & 40,000 & \\ \hline Accumulated Depreciation & & $2,400 \\ \hline Salaries and Wages Payable & & 0 \\ \hline Income Tax Payable & & 0 \\ \hline Common Stock & & 25,000 \\ \hline Retained Earnings & & 5,430 \\ \hline Service Revenue & & 19,570 \\ \hline Salaries and Wages Expense & 8,800 & \\ \hline Supplies Expense & 100 & \\ \hline Depreciation Expense & 0 & \\ \hline Insurance Expense & 0 & \\ \hline Fuel Expense & 1,250 & \\ \hline Income Tax Expense & 0 & \\ \hline Totals & 52,400 & $552,400 \\ \hline \end{tabular} Notes This equals the bank balance. Only windshield washer fluid that cost $30 remains at December 31. This amount was paid January 2 for car insurance from January 1 through December 31 of this year. This is the car's purchase price. The car will be two years old at the end of December. DDI has not yet paid or recorded $800 of salary for December. DDI paid all its taxes from last year. DDI issued 5,000 shares at $5 each. This is the total accumulated earnings to January 1 of this year. All revenue is received in cash when the service is given. DDI's only employee receives a monthly salary of $800 to December 31 . This is the cost of windshield washer fluid used to November 30 . The car's benefits are being used up about $2,400 per year. No car insurance has been paid for next year. All fuel is paid for in cash. DDI's tax rate is 20 percent of income before tax. 1. Use the notes to determine and record adjusting entries needed on December 31 for (a) supplies used up, (b) insurance costs, (c) using up the car's benefits, (d) salaries not yet accounted for, and (e) income taxes for the year. 2. Post the adjusting entries from requirement 1 to T-accounts to determine new adjusted balances, and prepare an adjusted trial balance. (If you are completing this exercise using the general ledger tool in Conneet, this requirement will be completed automatically for you.) 3. Using the adjusted balances from requirement 2, prepare an income statement, statement of DAILY DRIVER, INC. Unadjusted Trial Balance At December 31 \begin{tabular}{lrr|} \hline Account Name & Debit & Credit \\ \hline Cash & 1,000 & \\ \hline Supplies & 50 & \\ \hline Prepaid Insurance & 1,200 & \\ \hline Equipment & 40,000 & \\ \hline Accumulated Depreciation & & $2,400 \\ \hline Salaries and Wages Payable & & 0 \\ \hline Income Tax Payable & & 0 \\ \hline Common Stock & & 25,000 \\ \hline Retained Earnings & & 5,430 \\ \hline Service Revenue & & 19,570 \\ \hline Salaries and Wages Expense & 8,800 & \\ \hline Supplies Expense & 100 & \\ \hline Depreciation Expense & 0 & \\ \hline Insurance Expense & 0 & \\ \hline Fuel Expense & 1,250 & \\ \hline Income Tax Expense & 0 & \\ \hline Totals & 52,400 & $552,400 \\ \hline \end{tabular} Notes This equals the bank balance. Only windshield washer fluid that cost $30 remains at December 31. This amount was paid January 2 for car insurance from January 1 through December 31 of this year. This is the car's purchase price. The car will be two years old at the end of December. DDI has not yet paid or recorded $800 of salary for December. DDI paid all its taxes from last year. DDI issued 5,000 shares at $5 each. This is the total accumulated earnings to January 1 of this year. All revenue is received in cash when the service is given. DDI's only employee receives a monthly salary of $800 to December 31 . This is the cost of windshield washer fluid used to November 30 . The car's benefits are being used up about $2,400 per year. No car insurance has been paid for next year. All fuel is paid for in cash. DDI's tax rate is 20 percent of income before tax. 1. Use the notes to determine and record adjusting entries needed on December 31 for (a) supplies used up, (b) insurance costs, (c) using up the car's benefits, (d) salaries not yet accounted for, and (e) income taxes for the year. 2. Post the adjusting entries from requirement 1 to T-accounts to determine new adjusted balances, and prepare an adjusted trial balance. (If you are completing this exercise using the general ledger tool in Conneet, this requirement will be completed automatically for you.) 3. Using the adjusted balances from requirement 2, prepare an income statement, statement of