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Francine's Fast Deliveries, Inc. (FFD) was organized in December of 2011.It had limited activity in 2011. The resulting balance sheet at the beginning of 2012

Francine's Fast Deliveries, Inc. (FFD) was organized in December of 2011.It had limited activity in 2011. The resulting balance sheet at the beginning of 2012 is provided below:

Francine's Fast Deliveries, Inc.

Balance Sheet

at January 1, 2012Assets:Liabilities:Cash$1,025Accounts Payable$525Accounts Receivable550Stockholders' Equity:Supplies350Common Stock$1,000Retained Earnings400Total Assets$1,925Total Liabilities & Stk. Equity$1,925

January Transactions for Francine's Fast Deliveries, Inc. (FFD)

Date1Owners invest $20,000 of additional cash in the business.2aSupplies are purchased for $650 on account.2bInsurance is paid for 12 months beginning January 1: $6,420 (Record as an asset)2cRent is paid for 3 months beginning in January: $2,850 (Record as an asset)2dTwo employees are hired. Each employee will be paid $1,010 per month3FFD borrows $23,000 from 1stState Bank at 6% annual interest.6A delivery van is purchased for cash.Including tax the total cost was $33,600. It will be used for 4 years and will be depreciated monthly using straight-line with no salvage value. A full month of depreciation will be charged in January.

7$385 of the receivables from December's sales are collected.8$420 of the accounts payable from December are paid.9Performed services for customers on account.Mailed invoices totaling $8,600.10Services are performed for cash customers: $6,020.16Wages for the first half of the month are paid on January 16: $1,010.20The company receives $2,450 from a customer for an advance order for services to be provided in January and February.

25Collections from customers on account (see January 9 transaction): $3,44030aThe last 2 weeks wages earned by employees are $505 per employee and will be paid on February 3.

30bA $635 utility bill for January arrived. It is due on February 15.

Additional Information for adjusting entries at January 31:a.Supplies on hand on January 31 total $200.b.The company completed 60% of the deliveries for the customer who paid in advance on January 20.

c.Interest is accrued for the bank loan. (Assume a full month for the 1stState Bank loan.)d.Record January depreciation.e.Adjust the prepaid asset (Rent and Insurance) accounts as needed.

6.Prepare the adjusted trial balance, using the revised set of t-account balances.

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