Fast Deliveries, Inc. (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: Assets: Cash Accounts Receivable Supplies $ 500 $ 10,900 740 770 FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 11,410 500 $12,410 Total Assets $12,410 Two employees have been hired, at a monthly salary of $2,900 each. The following transactions occurred during January of the current year. Ch. 2 2 2. January 1 2 3 NNNNN 4 5 6 7 8 9 10 16 20 $4,500.is paid for 12 months' insurance starting January 1. (Record as an asset.) $3,600 is paid for 12 months of rent beginning January 1. (Record as an asset.) PDI borrows $28,800 cash from First State Bank at 48 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 $5,000 of additional cash to FDI for its common stock. Additional supplies conting $1,100 are purchased on account and received. $600 of accounts receivable arising from last year's December sales are collected. $500 of accounts payable from December of last year are paid. Performed services for customers on account. Sent invoices totaling $10,500. $7,800 of services are performed for customers who paid immediately in cash. $2,900 of salaries are paid for the first half of the month. PDI receives $3,900 cash from a customer for an advance order for services to be provided later in January and in February. $3,600 is collected from customers on account (see January 9 transaction). 3 3 3 3 3 25 Ch. 4 4 4 4 January Additional information for adjusting entries 31a. A $1,200 bill arrives for January utility services. Payment is due February 15. 31b. Supplies on hand on January 31 are counted and determined to have cost $210. 310. As of January 31, PDI had completed 60% of the deliveries for the customer who paid in advance on January 20. 31d. 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 0.04). For convenience, calculate January interest as one-twelfth of the annual interest. 310. 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. 31. Salaries earned by employees for the period from January 16-31 are $1,450 per employee and will be paid on February 3. 31g. Adjust the prepaid asset accounts (for rent and insurance) as needed. 4 4 Required information Accounts Receivable 740 5 Beg. Bal. (9) 10,500 600 (7) 3,600 (25) Beg. Bal. (3) (5) (7) (10) (20) (25) Cash 10,900 28,800 5,000 600 7,800 3,900 3,600 4,500 (1) 3,600 (2) 19,200 (4) 500 (8) 2,900 (16) End. Bal 29,900 End. Bal. 7,040 Prepaid Insurance Supplies 770 Beg. Bal. (6) Beg. Bal (1) 1,100 4,500 1,660 End. Bal. 210 End. Bal. 4,500 Prepaid Rent Equipment Beg. Bal. (2) Beg. Bal. (4) 3,600 500 19,200 End. Bal. 3,100 End. Bal. 19,200 Accumulated Depreciation Accounts Payable Accumulated Depreciation 0 Beg. Bal. Beg. Bal. (8) Accounts Payable 500 500 1,100 (6) 400 400 End. Bal. End. Bal 1.100 Deferred Revenue Notes Payable (long-term) Beg. Bal. Bog. Bal. 3,900 (20) 28,800 (3) End. Bal. 3,900 End. Bal. 28,800 Interest Payable Salaries and Wages Payable Beg. Bal. Beg. Bal 120 1,180 End. Bal. 120 End. Bal 1,180 Beg. Bal. Common Stock 11.410 5,000 (5) Retained Earnings 500 Beg Bal End. Bal. 16,410 End. Bal. 500 Service Revenue Salaries and Wages Expense RAR Ral Ron Ral Required information Service Revenue Salaries and Wages Expense Beg Bal Beg. Bal. (16) 2,900 1,180 10,500 (9) 7,800 (10) 2,340 20,640 End. Bal End. Bal. 4,080 Utilities Expense Supplies Expenses Beg. Bal. Bog. Bal. 0 1,200 1,660 0 1,200 End. Bal. End. Bal. 1,660 Interest Expense Beg. Bal. 0 Beg. Bal Insurance Expenses 0 375 0 375 96 0 96 End. Bal. End. Bal. Rent Expense 0 Beg. Ball Bog. Bal. 300 0 Depreciation Expense 0 400 0 4001 300 Required information Credit 400 FAST DELIVERIES, INC. Unadjusted Trial Balance At January 31 Account Titles Debit Cash 29,900 Accounts Receivable 7,040 Supplies 210 Prepaid Insurance 4,500 Prepaid Rent 3,300 Equipment 19,200 Accumulated Depreciation Accounts Payable Deferred Revenue Notes Payable (long-term) Salaries and Wages Payable Interest Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Supplies Expenses 1,660 Depreciation Expense 400 Interest Expense 96 Totals $ 66,306 1,100 3,900 28,800 2,900 96 16,410 500 1,740 2,900 $ 58,746 Fast Deliveries, Inc. (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: Assets: Cash Accounts Receivable Supplies $ 500 $ 10,900 740 770 FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 11,410 500 $12,410 Total Assets $12,410 Two employees have been hired, at a monthly salary of $2,900 each. The following transactions occurred during January of the current year. Ch. 2 2 2. January 1 2 3 NNNNN 4 5 6 7 8 9 10 16 20 $4,500.is paid for 12 months' insurance starting January 1. (Record as an asset.) $3,600 is paid for 12 months of rent beginning January 1. (Record as an asset.) PDI borrows $28,800 cash from First State Bank at 48 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 $5,000 of additional cash to FDI for its common stock. Additional supplies conting $1,100 are purchased on account and received. $600 of accounts receivable arising from last year's December sales are collected. $500 of accounts payable from December of last year are paid. Performed services for customers on account. Sent invoices totaling $10,500. $7,800 of services are performed for customers who paid immediately in cash. $2,900 of salaries are paid for the first half of the month. PDI receives $3,900 cash from a customer for an advance order for services to be provided later in January and in February. $3,600 is collected from customers on account (see January 9 transaction). 3 3 3 3 3 25 Ch. 4 4 4 4 January Additional information for adjusting entries 31a. A $1,200 bill arrives for January utility services. Payment is due February 15. 31b. Supplies on hand on January 31 are counted and determined to have cost $210. 310. As of January 31, PDI had completed 60% of the deliveries for the customer who paid in advance on January 20. 31d. 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 0.04). For convenience, calculate January interest as one-twelfth of the annual interest. 310. 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. 31. Salaries earned by employees for the period from January 16-31 are $1,450 per employee and will be paid on February 3. 31g. Adjust the prepaid asset accounts (for rent and insurance) as needed. 4 4 Required information Accounts Receivable 740 5 Beg. Bal. (9) 10,500 600 (7) 3,600 (25) Beg. Bal. (3) (5) (7) (10) (20) (25) Cash 10,900 28,800 5,000 600 7,800 3,900 3,600 4,500 (1) 3,600 (2) 19,200 (4) 500 (8) 2,900 (16) End. Bal 29,900 End. Bal. 7,040 Prepaid Insurance Supplies 770 Beg. Bal. (6) Beg. Bal (1) 1,100 4,500 1,660 End. Bal. 210 End. Bal. 4,500 Prepaid Rent Equipment Beg. Bal. (2) Beg. Bal. (4) 3,600 500 19,200 End. Bal. 3,100 End. Bal. 19,200 Accumulated Depreciation Accounts Payable Accumulated Depreciation 0 Beg. Bal. Beg. Bal. (8) Accounts Payable 500 500 1,100 (6) 400 400 End. Bal. End. Bal 1.100 Deferred Revenue Notes Payable (long-term) Beg. Bal. Bog. Bal. 3,900 (20) 28,800 (3) End. Bal. 3,900 End. Bal. 28,800 Interest Payable Salaries and Wages Payable Beg. Bal. Beg. Bal 120 1,180 End. Bal. 120 End. Bal 1,180 Beg. Bal. Common Stock 11.410 5,000 (5) Retained Earnings 500 Beg Bal End. Bal. 16,410 End. Bal. 500 Service Revenue Salaries and Wages Expense RAR Ral Ron Ral Required information Service Revenue Salaries and Wages Expense Beg Bal Beg. Bal. (16) 2,900 1,180 10,500 (9) 7,800 (10) 2,340 20,640 End. Bal End. Bal. 4,080 Utilities Expense Supplies Expenses Beg. Bal. Bog. Bal. 0 1,200 1,660 0 1,200 End. Bal. End. Bal. 1,660 Interest Expense Beg. Bal. 0 Beg. Bal Insurance Expenses 0 375 0 375 96 0 96 End. Bal. End. Bal. Rent Expense 0 Beg. Ball Bog. Bal. 300 0 Depreciation Expense 0 400 0 4001 300 Required information Credit 400 FAST DELIVERIES, INC. Unadjusted Trial Balance At January 31 Account Titles Debit Cash 29,900 Accounts Receivable 7,040 Supplies 210 Prepaid Insurance 4,500 Prepaid Rent 3,300 Equipment 19,200 Accumulated Depreciation Accounts Payable Deferred Revenue Notes Payable (long-term) Salaries and Wages Payable Interest Payable Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Supplies Expenses 1,660 Depreciation Expense 400 Interest Expense 96 Totals $ 66,306 1,100 3,900 28,800 2,900 96 16,410 500 1,740 2,900 $ 58,746