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 Assets Liabilities Cash $ 12,100 Accounts Payable $ 700 Accounts Receivable 710 Stockholders Equity Supplies 330 Common Stock 11,930 Retained Earnings 510 Total Assets $ 13,140 Total Liabilities and Stockholders Equity $ 13,140 Two employees have been hired, at a monthly salary of $2,700 each The following transactions occurred during January of the current year January 1 $4,200 is paid for 12 months insurance starting January 1 (Record as an asset ) 2 $4,800 is paid for 12 months of rent beginning January 1 (Record as an asset ) 3 FDI borrows $28,800 cash from First State Bank at 5 annual interest this note is payable in two years 4 A delivery van is purchased using cash Including tax, the total cost was $24,000 5 Stockholders contribute $8,000 of additional cash to FDI for its common stock 6 Additional supplies costing $900 are purchased on account and received 7 $500 of accounts receivable arising from last years December sales are collected 8 $400 of accounts payable from December of last year are paid 9 Performed services for customers on account Sent invoices totaling $10,500 10 $7,900 of services are performed for customers who paid immediately in cash 16 $2,700 of salaries are paid for the first half of the month 20 FDI receives $4,000 cash from a customer for an advance order for services to be provided later in January and in February 25 $4,200 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 Supplies on hand on January 31 are counted and determined to have cost $240 31c As of January 31, FDI 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 05) For convenience, calculate January interest as one twelfth of the annual interest 31e Assume the van will be used for 4 years, after which it will have no value Thus, each year, one fourth of the vans benefits will be used up, which implies annual depreciation equal to one fourth of the vans total cost Record depreciation for the month of January, equal to one twelfth of the annual depreciation expense 31f Salaries earned by employees for the period from January 16 to 31 are $1,350 per employee and will be paid on February 3 31g 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

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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

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
Assets:		Liabilities:
Cash	$ 12,100	Accounts Payable	$ 700
Accounts Receivable	710	Stockholders Equity:
Supplies	330	Common Stock	11,930
		Retained Earnings	510
Total Assets	$ 13,140	Total Liabilities and Stockholders Equity	$ 13,140

Two employees have been hired, at a monthly salary of $2,700 each. The following transactions occurred during January of the current year.

January
1	$4,200 is paid for 12 months insurance starting January 1. (Record as an asset.)
2	$4,800 is paid for 12 months of rent beginning January 1. (Record as an asset.)
3	FDI borrows $28,800 cash from First State Bank at 5% annual interest; this note is payable in two years.
4	A delivery van is purchased using cash. Including tax, the total cost was $24,000.
5	Stockholders contribute $8,000 of additional cash to FDI for its common stock.
6	Additional supplies costing $900 are purchased on account and received.
7	$500 of accounts receivable arising from last years December sales are collected.
8	$400 of accounts payable from December of last year are paid.
9	Performed services for customers on account. Sent invoices totaling $10,500.
10	$7,900 of services are performed for customers who paid immediately in cash.
16	$2,700 of salaries are paid for the first half of the month.
20	FDI receives $4,000 cash from a customer for an advance order for services to be provided later in January and in February.
25	$4,200 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.	Supplies on hand on January 31 are counted and determined to have cost $240.
31c.	As of January 31, FDI 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 0.05). For convenience, calculate January interest as one-twelfth of the annual interest.
31e.	Assume the van will be used for 4 years, after which it will have no value. Thus, each year, one-fourth of the vans benefits will be used up, which implies annual depreciation equal to one-fourth of the vans total cost. Record depreciation for the month of January, equal to one-twelfth of the annual depreciation expense.
31f.	Salaries earned by employees for the period from January 16 to 31 are $1,350 per employee and will be paid on February 3.
31g.	Adjust the prepaid asset accounts (for rent and insurance) as needed.