Required information C4-6 (Algo) 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) [The following information applies to the questions displayed below) Fast Deliveries, Incorporated (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: FAST DELIVERIES, INCORPORATED Balance Sheet at January 1 Assets: Liabilities: Cash $ 12,100 Accounts Payable $ 700 Accounts Receivable Stockholders' Equity! Supplies Common Stock 11,931 Retained Earnings 510 Total Liabilities and Stockholders' Equity $ 13,140 Two employees have been hired, at a monthly salary of $2,700 each. The following transactions occurred during January of the current year 710 330 Total Assets $ 13, 140 January 1 2 3 4 5 6 7 B 9 10 16 20 $4,200 is paid for 12 months insurance starting January 1. (Record as an asset.) 54,800 is paid for 12 months of rent beginning January 1. (Record as an asset.) FDI borrows $28,800 cash from First State Bank at 50 annual interest: this note is payable in two years. Adelivery van is purchased using cash. Including tax, the total cost was $24,000. Stockholders contribute $0,000 of additional cash to PDI for its common stock Additional supplies conting $900 are purchased on account and received 5500 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 $10,500. $7,900 of services are performed for customers who paid immediately in canh. $2,700 of salaries are paid for the first half of the month. YDI receives $4,000 cash from a customer for an advance order for services to be provided later in January and in February $4,200 in collected from customers on account (nee January 9 transaction). 25 January 313. 31b 310 31d. Additional information for adjusting entries A $800 bill arrives for January utility services. Payment is due February 15. Supplies on hand on January 31 are counted and determined to have cost $240. As of January 31, YDI had completed 60% of the deliveries for the customer who paid in advance on January 20. 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). Yor convenience, calculate January interest a one-twelfth of the annual interest Assume the van will be used for 4 years, after which it will have no value. Thus, cach year, one-fourth of the van's benefits will be used up, which implien 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. Salaries earned by employees for the period from January 16 to 31 are $1,350 per employee and will be paid on February 3. Adjust the prepaid asset accounts for rent and insurance) as needed. 3le. 311 319. C4-6 (Algo) Part 4 Required: 4. Record all adjusting journal entries needed at January 31. GO BACK TO PART 2 AND POST THE ADJUSTING JOURNAL ENTRIES IN THE T-ACCOUNTS BEFORE MOVING ON TO PART 5. Ignore income taxes. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list View Journal entry worksheet Debit General Journal No Credit Transaction (a) 800 1 Utilities Expense Accounts Payable 800 1.470 2 (b) Supplies Expense Supplies 1.470 3 (c) Deferred Revenue Service Revenue + d 4 (d) Interest Expense Interest Payable 5 (0) 500 Depreciation Expense Accumulated Depreciation 500 6 Salaries and Wages Expense Salaries and Wages Payable 7 (91) insurance Expense Prepaid insurance 8 (92) 400 Rent Expense Prepaid Rent 400