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Daily Driver, Incorporated (DDI), operates a driving service through a popular ride-sharing app. DDI has prepared a list of unadjusted account balances at its December 31 year-end. You have reviewed the balances and made notes shown in the right column.
DAILY DRIVER, INCORPORATED
Unadjusted Trial Balance
At December 31
Account Name Debit Credit Notes
Cash $ 1,600 This equals the bank balance.
Supplies 170 Only windshield washer fluid that cost $30 remains at December 31.
Prepaid Insurance 1,800 This amount was paid January 2 for car insurance from January 1 through December 31 of this year.
Equipment 64,000 This is the cars purchase price.
Accumulated Depreciation $ 3,840 The car will be two years old at the end of December.
Salaries and Wages Payable 0 DDI has not yet paid or recorded $1,040 of salary for December.
Income Tax Payable 0 DDI paid all its taxes from last year.
Common Stock 37,000 DDI issued 7,400 shares at $5 each.
Retained Earnings 6,030 This is the total accumulated earnings to January 1 of this year.
Service Revenue 33,970 All revenue is received in cash when the service is given.
Salaries and Wages Expense 11,200 DDIs only employee receives a salary of $1,040 for December.
Supplies Expense 220 This is the cost of windshield washer fluid used to November 30.
Depreciation Expense 0 The cars benefits are being used up about $3,840 per year.
Insurance Expense 0 No car insurance has been paid for next year.
Fuel Expense 1,850 All fuel is paid for in cash.
Income Tax Expense 0 DDIs tax rate is 20% of income before tax.
Totals $ 80,840 $ 80,840
Post the beginning balances and adjusting entries to the following T-accounts.

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