PART1: The following transactions occurred for Murphy Delivery Service during December 2020: 1 Murphy Delivery Service began operations by receiving $27,000 cash and a truck with a fair value of $16,320 from Russ Murphy. The business issued Murphy shares of common stock in exchange for this contribution. Paid $3,840 cash for a one-year insurance policy. The policy begins on December 1. Paid $1200 cash for office supplies. 12 Performed delivery services for a customer and received $4,500 cash. 15 2222 Completed a large delivery job, billed the customer, $10,800, and received a promise to collect the $10,800 within one week Paid employee salary, $3,900. Received $8,000 cash for performing delivery services. 22 Collected $5,200 in advance for delivery service to be performed later. 25 Collected $10,800 cash from a customer on account. 27 Purchased fuel for the truck, paying $750 on the account. (Credit Accounts Payable) 28 Performed delivery services on account, $5,750. 29 Paid office rent, $2,550, for the month of December. 30 Paid $460 on the account. 31 Cash dividends of $3,450 were paid to stockholders. Assume that Murphy Delivery Service started its operations in December 2020 and the beginning balance in all accounts is zero. 1 Requirements: 1. Record each transaction in the journal using the following chart of accounts. Explanations are not required. (14 points-1 point each) Cash Accounts Receivable Office Supplies Prepaid Insurance Truck Accumulated Depreciation-Truck Accounts Payable Salaries Payable Unearned Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries Expense 2. Post the transactions in the T-accounts. (6 points) Depreciation Expense-Truck Insurance Expense Fuel Expense Rent Expense Supplies Expense 3. Prepare an unadjusted trial balance as of December 31, 2020. (6 points) 4. Journalize the adjusting entries using the following adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the T-accounts. (6 points-1 point each) a. Depreciation was recorded on the truck using the straight-line method. Assume a useful life of eight years and a residual value of $2,600. b. Office Supplies on hand, $780. c. Accrued Service Revenue, $2,750. d. Accrued Salaries Expense, $1,800. e. Prepaid Insurance for the month has expired. f. Unearned Revenue earned during the month, $3,250. 5. Prepare Murphy Delivery Service's income statement and statement of retained earnings for the month ended December 31, 2020, and the classified balance sheet on that date. (12 points) 6. Journalize the closing entries, and post to the T-accounts (using the accounts we covered in class). (6 points) 7. Prepare a post-closing trial balance as of December 31, 2020. (5 points) PART2: Murphy Delivery Service has completed closing entries and the accounting cycle for 2020. The business is now ready to record January 2021 transactions. Jan. 3 Collected $1,400 cash from customer on account. 5 Purchased office supplies on account, $1,250. 12 Performed delivery services for a customer and received $3,500 cash. Paid employee salary, including the amount owed on December 31, $6,900. Performed delivery services on account, $2,850. 15 18 20 Paid $900 on account. 24 Purchased fuel for the truck, paying $450 cash 27 28 Completed the remaining work due for Unearned Revenue. Paid office rent, $3,000, for the month of January. 30 Collected $4,500 in advance for delivery service to be performed later. 31 Cash dividends of $1,850 were paid to stockholders. Requirements: 1. Record each transaction in the journal. Explanations are not required. (11 points-1 point each) 2. Post the transactions in the T-accounts. Don't forget to use the December 31, 2020, ending balances as appropriate. (8 points) 3. Prepare an unadjusted trial balance as of January 31, 2021. (6 points) 4. Journalize the adjusting entries using the following adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the T-accounts. (5 points-1 each) a. Depreciation was recorded on the truck for the month. b. Office Supplies on hand, $350. c. Accrued Service Revenue, $2,400. d. Accrued Salaries Expense, $900. e. Prepaid Insurance for the month has expired. 5. Prepare Murphy Delivery Service's income statement and statement of retained earnings for the month ended January 31, 2021, and the classified balance sheet on that date. (15 points)