Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

COMPREHENSIVE PROBLEM (Completing the Accounting Cycle Chapters 1-3) Murfee Delivery Service is a delivery service company that delivers anything to anyone anywhere. The company intends

COMPREHENSIVE PROBLEM (Completing the Accounting Cycle Chapters 1-3)

Murfee Delivery Service is a delivery service company that delivers anything to anyone anywhere. The company intends to stand out due to its strict confidentiality policy forbidding any disclosure of its customers personal information, for a profit or otherwise. The company also adds, as part of its robust confidentiality policy, it will never poke fun or humiliate its customers for the ridiculous, and sometimes even embarrassing, items they choose to have delivered. Murfee Delivery Service began operations on December 1, 2019.

The following transactions occurred during the month of December:

Dec 1 Sold $22,000 of common stock to Eddie Murfee, the founder of the company.

Dec 1 Purchased a $9,000 delivery van by signing a note, agreeing to repay principle and interest in 2 years. The van was purchased from Eddies cousins boyfriend, Christopher Farleigh. The van was in great condition, especially considering that Christopher lived in the van down by the river for a short period of time while he was looking for an apartment.

Dec 1 Paid $600 in advance for a six-month general liability insurance policy from Ned Ryerson Insurance Group.

Dec 1 Hired 2 delivery drivers, Clark Griswold and Van Wilder. Surprisingly, both drivers passed their drug tests and background checks, and they were able to begin working immediately.

Dec 4 Purchased $750 of office supplies from Dunder Mifflin Office Supply Store on account.

Dec 12 Delivered a Get Well Deluxe Wellness Kit to Ferris Bueller and received $2,200 cash.

Dec 15 Delivered 243 cases of wine for the annual Catalina Wine Mixer in California. Willis Ferrill was billed $3,300 on account for services rendered.

Dec 18 Paid employee salaries to Clark and Van totaling $2,400.

Dec 20 Received $10,600 payment for services from Owen Wilzen for delivering wedding gifts to all the couples of weddings he has attended (uninvited) since 2005.

Dec 22 Collected $2,200 in advance from Billy Muree to have Punxsutawney Phil delivered from his home in Calabasas, California, to Punxsutawney, Pennsylvania, in time for a special appearance on February 2nd.

Dec 25 Collected $3,300 from Willis Ferrill for the December 15th delivery.

Dec 27 Received a bill for $150 from Frankenstein Electric Company for December utilities, due on January 10.

Dec 29 Paid office rent, $2,800, to the property manager, Jim Halpert, for December and January Rent.

Dec 30 Paid $150 to Frankenstein Electric Company for the bill received on December 27th.

Dec 31 Paid cash dividends of $2,500 to stockholders.

Requirements:

  1. Record all necessary journal entries for the December transactions. Note: Not all transactions in December require a journal entry. If no entry is required, you may choose to simply omit the transaction, or you may choose to record the date of the transaction and write NO ENTRY in the space where the accounts & amounts would normally be written.
  2. Post the journal entries to the T-Accounts.
  3. Prepare an Unadjusted Trial Balance as of December 31, 2019.
  4. Record the adjusting entries as of December 31, 2019. Additional information necessary for adjusting entries is below:
    1. Accrued Salaries for the last two weeks in December, $2,400, will be paid in January.
    2. The prepaid insurance policy began on December 1.
    3. Office Supplies on hand are $450.
    4. The Note Payable on December 1 has an interest rate of 7%. Interest and principle are due in 2 years.
    5. Weekly deliveries made to Liyam Hemmensworth in the month of December totaling $8,000 have not been invoiced.
  5. Post the adjusting entries to the T-Accounts. Note: You will be adding to the T-accounts you created in Step 2.
  6. Prepare an Adjusted Trial Balance as of December 31, 2019.
  7. Prepare the income statement and statement of stockholders equity for the month ended December 31, 2019. Prepare the classified balance sheet as of December 31, 2019.
  8. Record the closing entries as of December 31, 2019.
  9. Post the closing entries to the T-Accounts. Note: You will be adding to the T-accounts you created in Step 2 and updated in Step 5.
  10. Prepare a Post-Closing Trial Balance as of December 31, 2019.

CHECK FIGURES:

Unadjusted Trial Balance Debit & Credit Totals $50,050

Adjusted Trial Balance Debit & Credit Totals $60,503

***(Note: Interest Exp. & Interest Pay. is rounded up)***

Net Income $17,297

Retained Earnings $14,797

Total Assets $51,200

Total Liabilities $14,403

Total Stockholders' Equity $36,797

Post-Closing Trial Balance Debit & Credit Totals $51,200

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jr. Belverd E. Needles, Marian Powers

9th Edition

0547070020, 978-0547070025

More Books

Students also viewed these Accounting questions

Question

What did the court think about that argument?

Answered: 1 week ago

Question

f. What subspecialties and specializations does the person list?

Answered: 1 week ago

Question

Explain the factors influencing wage and salary administration.

Answered: 1 week ago

Question

Examine various types of executive compensation plans.

Answered: 1 week ago

Question

1. What is the meaning and definition of banks ?

Answered: 1 week ago

Question

List the four steps in the model for giving praise.

Answered: 1 week ago

Question

List the criteria for setting objectives.

Answered: 1 week ago

Question

Describe four content motivation theories.

Answered: 1 week ago