RECORD ALL ADJUST ENTRIES

C4-6 Recording/Posting Transactions and Adjustments, and Preparing Trial Balances and Financial Statements-Requires Calculating Depreciation and Interest (Chapters 2, 3, and 4) (LO 2-3, LO 3-3, LO 4- 2, LO 4-4) Fast Deliveries, Inc. (FDI), was organized in December last year and had limited activity last year. The resulting balance sheet at the beginning of the current year is provided below: $ 700 Assets: Cash Accounts Receivable Supplies $11,600 880 370 FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity: Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 11,430 720 Total Assets $12,850 $12,850 Two employees have been hired, at a monthly salary of $2,360 each. The following transactions occurred during January of the current year. Ch. January $5,700 is paid for 12 months' insurance starting January 1. (Record as an asset.) $4,800 is paid for 12 months of rent beginning January 1. (Record as an asset.) FDI borrows $25,200 cash from First State Bank at 5% 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 $5,000 of additional cash to FDI for its common stock. Additional supplies costing $1,500 are purchased on account and received. $800 of accounts receivable arising from last year's December sales are collected. $400 of accounts payable from December of last year are paid. Performed services for customers on account. Sent invoices totaling $10,000. $7.990 of services are performed for customers who naid immediately in cash. ON 10 000 NNNNMmmmm Stockholders contribute $5,000 of additional cash to FDI for its common stock. Additional supplies costing $1,500 are purchased on account and received. $800 of accounts receivable arising from last year's December sales are collected. $400 of accounts payable from December of last year are paid. Performed services for customers on account. Sent invoices totaling $10,000. $7,900 of services are performed for customers who paid immediately in cash. $2,360 of salaries are paid for the first half of the month. FDI receives $4,000 cash from a customer for an advance order for services to be provided later in January and in February. $4,300 is collected from customers on account (see January 9 transaction). 16 20 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 $290. 31c. As of January 31, FDI 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 0.05). For convenience, calculate January interest as one-twelfth of the annual interest. 31e. 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 $1,180 per employee and will be paid on February 3. 31g. Adjust the prepaid asset accounts for rent and insurance) as needed. Jourriel erilry Workstieel 4 5 6 7 8 Record the adjusting entry for receipt of a $1,100 bill for January utility services. Payment is due February 15. Note: Enter debits before credits. Date General Journal Debit Credit (a) Journal entry worksheet 3 4 5 6 7 8 Record the adjusting entry for supplies on hand on January 31 that are counted and determined to have cost $290. Note: Enter debits before credits. Date General Journal Debit Credit (b) Record entry Clear entry View general journal Journal entry worksheet