Question
Kays Delivery Service begun operation in 2020 and the owner of the company Karen Taylor has reques te d the assistance of your group in
Kays Delivery Service begun operation in 2020 and the owner of the company Karen Taylor has requested the assistance of your group in the preparation of the companys accounts. The company presented the following chart of accounts for use in the recording of its transactions:
Cash | Service revenue |
Accounts receivable | Salary expense |
Supplies | Depreciation expense |
Prepaid Insurance | Insurance expense |
Delivery truck | Fuel expense |
Accumulated depreciation | Rent expense |
Accounts payable | Supplies expense |
Salary payable | Income summary |
Unearned service revenue |
|
Kays, Capital |
|
Kays, Drawing |
|
During the period January to December 2020 the company completed the following transactions:
A. Kays Delivery Service began operations by receiving $180,000 cash and a truck valued at $250,000. The business gave Kay capital to acquire these assets.
B. Paid $19,000 cash for supplies.
C. Prepaid insurance, $28,000.
D. Performed delivery services for a customer and received $5,500 cash.
E. Completed a large delivery job, billed the customer $35,500, and received a promise to collect the $35,500 within three (3) months.
F. Paid employees salary, $65,700.
G. Received $15,000 cash for performing delivery services.
H. Collected $12,000 in advance for delivery service to be performed later.
I. Collected $35,500 cash from a customer on account.
J. Purchased fuel for the truck, paying $29,800 with a company credit card. (Credit Accounts payable)
K. Performed delivery services on account, $4,500.
L. Paid office rent, $85,000 for the year.
M. Paid $20,800 on account relating to fuel purchased.
N. Owner withdrew cash of $15,300.
Requirements:
O. Accrued salary expense, $19,500.
P. Depreciation expense, $6,500.
Q. Prepaid insurance expired, $24,000.
R. Supplies on hand, $2,500.
S. Unearned service revenue earned during 2020, $7,000.
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