need retained earnings and Balance sheet
Two employees have been hired, at a monthly salary of $2,100 each. The following transactions occurred during January of the current year. Ch. January $4,200 is paid for 12 months" insurance starting January 1. (Record as an asset.) 53,600 is paid for 12 months of rent beginning January 1. (Record as an asset.) FDI borrows $30, ce cash from First State Bank at ex 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 $8,000 of additional cash to FDI for its common stock. Additional supplies costing $1,400 are purchased on account and received $800 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 $11,6ee. 57,400 of services are perforsed for customers who paid immediately in cash. $2,100 of salaries are paid for the first half of the month. FOI receives $3,700 cash from a customer for an advance order for services to be provided later in January and in February. $3,989 is collected from customers on account (see January 9 transaction). 25 Ch. January Additional information for adjusting entries: 31a. A $1,100 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 $260. 31c. As of January 31, FOI 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 0.84). For convenience, calculate anuary interest as one-twelfth of the annual interest. Ble. 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. 31f. Salaries earned by employees for the period from January 16-31 are si,ese per employee and will be paid on February 3. 31g. Adjust the prepaid asset accounts (for rent and insurance) as needed. FAST DELIVERIES, INC. Income Statement For the Month Ended January 31 Revenues Service Revenue $ 21,220 21.220 400 19,200 790 350 Total Revenues Expenses Depreciation Expense Equipment Supplies Expenses Insurance Expense Rent Expense Salaries and Wages Expense Utilities Expense Interest Expense Total Expenses Net Loss E 300 200 100 100 S 8.220 Prepare the statement of retained earnings. FAST DELIVERIES, INC Statement of Retained Earnings For the Month Ended January 31 Retained earnings, beginning of period s Add: Net Loss Less: Dividends Retained earnings, end of period 840 Reg 5A | Req 5B Req 5C Prepare the balance sheet. O O Reg 5B w D 36,100 7.720 280 3,300 3.850 19,200 Recent Titles Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Deferred Revenue Salaries and Wages Payable Interest Payable Notes Payable (long-term) Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Utilities Expense Supplies Expenses Depreciation Expense Insurance Expense Rent Expense Interest Expense Totals 400 2,700 1,480 2,100 100 30.000 19,830 840 21.220 4,200 1.100 1.790 400 350 300 100 S78.670 S 78.870
