On December 1, 2018, Doug Hart formed a corporation to provide moving services for business and residential customers. Information about the first month of operation for Doug Hart Moving, Inc. follows: Reference Transaction Date # 12/1 Investors provided $750,000 of cash in exchange for stock of Hart Corporation 2 12/3 Purchased a fleet of delivery trucks costing $450,000 in exchange for 200,000 cash and a $250,000 note payable 12/3 Purchased and paid for a one-year insurance policy for $24,000 cash 3 Purchased $60,000 of packing supplies from Lorenzo Inc. on account 4 12/4 Paid wages of $45,900 12/8 6 12/10 Billed customers for services provided in the amount of $175,000 Paid $17,000 of the amount owed for the transaction on Dec 4 7 12/12 12/13 Collected $75,000 on accounts receivable 8 12/13 9 Paid wages of $59,000 10 12/15 Paid $9,000 for fuel costs used Collected $125,000 as deposits from customers who contracted for future moving services 11 12/15 12/18 Paid $9,500 for lodging (hotel rooms) costs incurred by crew 12 Paid $27,000 of the Note Payable 12/19 13 12/19 Billed customers for services provided in the amount of $65,000 14 12/20 Collected $35,000 on accounts receivable 15 Purchased $14,000 of packing supplies 16 12/20 on account Paid a $25,000 dividend to shareholders. 17 12/31 Mitchell Company uses the following Chart of Accounts: Accounts Payable Cash Dividends Supplies Expense Interest Payable Interest Expense Accounts Receivable Revenues Unearned Revenue Supplies Wage Expense Depreciation Expense Notes Payable Fuel Expense Prepaid Insurance Delivery Trucks Common Stock Lodging Expense Accum. Depreciation | Retained Earnings Insurance Expense REQUIRED Prepare journal entries for transactions 1 - 17. Post the transactions to the appropriate general ledger T accounts. Use the Ref# Prepare a trial balance as of December 31. 4 2 Prepare adjusting entries on December 31 based on the following additional information a. The delivery trucks have a 5-year life, with no salvage value b. Supplies Employees earned wages of $25,000 during December 2018, which will be paid in January 2019 d. The insurance policy covered a 12-month period e. Provided services in the amount of $55,000 for customers who paid deposits 15th Prepare an format in Exhibit 3-4 from your text as a Prepare an income statement, statement of stockholders' equity and a classified balance sheet as of the end of 2018. Please use good form including company name and date 7 on hand at year end amount to $10,000. . on December adjusted trial balance as of December 31. Post the adjusting entries using the guide (p. 133) 5 6 Prepare closing entries. Prepare a post-closing trial balance as of December 31, 2018. Hart started out the month with $0 in cash. Compare the increase in cash to the amount reported as Net Income on the Income Statement. What are the reasons that these amounts differ? Be specific and explain in terms of accrual accounting principles. Comment on Hart Inc. 's profitability and its ability to pay its short and long term obligations 9 10 OO O Adjusting Journal Entries 31-Dec To recod one month of depreciation expense on delivery trucks 31-Dec To recod one month of depreciation expense on delivery trucks 31-Dec To record accrual of wages owed in Jan. 31-Dec To record one month insurance expense 31-Dec To record revenue on services rendered Mitchell Corporation Unadjusted Trial Balance December 31, 2017 Debit Adjusted Trial Balance Adjustments Balance Sheet Income Statement Credit Credit Debit Debit Credit Assets: Revenue ash 568,600 568,600 Cash 568,600 ommon Stock 750,000 Expenses: elivery Truck 450,000 oets Payable 223,000 repaid Insurance 24,000 Delivery Truck evenue 240,000 Accumulated Depreciation Truck neard Revenue 125,000 Net Truck ividends 25,000 Total Assets upplies 74,000 ccounts Payable Liabilities 57,000 Total Expenses 0 age Expense 104,900 Net Gain ccounts Receivable 130,000 uel Expense 9,000 Statement of stock hol de rs' EQUITY odiging Expense 9,500 Common Stock Retained Earings Total Total Liabiliies 1-Dec 0 0 Stock hol der's Equity Common Stock Issued 0 Net Gain Dividends 31-Dec Total Stockholders Equitu 0 otals 1,395,000 1,395,000 568,600 Total Stockholders' Equity and Liabilities