! Required information 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: FAST DELIVERIES, INC. Balance Sheet at January Liabilities: $11,000 Accounts Payable Accounts Receivable 820 Stockholders' Equity: Supplies 460 Common Stock 11,150 Retained Earnings Total Assets $12,280 Total Liabilities and Stockholders' Equity $12,280 Assets! Cash $ 400 730 Two employees have been hired, at a monthly salary of $2,900 each. The following transactions occurred during January of the current year. Ch. 2 2 2 January 1 2 3 NNNN 4 5 6 $3,600 is paid for 12 months' insurance starting January 1. (Record as an asset.) $3,600 is paid for 12 months of rent beginning January 1. (Record as an asset.) FDI borrows $33,600 cash from First State Bank at 68 annual interest; this note is payable in two years. A delivery van is purchased using cash. Including tax, the total cost was $24,000. Stockholders contribute $8,000 of additional cash to FDI for its common stock. Additional supplies conting $1,500 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 $11,200. $7,100 of services are performed for customers who paid immediately in cash. $2,900 of salaries are paid for the first half of the month. TDI receives $3,600 cash from a customer for an advance order for services to be provided later in January and in February. $4,100 is collected from customers on account (see January 9 transaction). 2 3 3 8 9 10 16 20 3 25 Ch. 4 4 4 5 4 January Additional information for adjusting entries A $1,000 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. Jle. As of January 31, YDI had completed 601 of the deliveries for the customer who paid in advance on January 20. 31d. Acerve one month of Interest on the bank loan. Yearly interest is determined by multiplying the amount borrowed by the annual interest rate (expressed as 0.06). For convenience, calculate January interest as one-twelfth of the annual interest. 3le. 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 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. salaries earned by employees for the period from January 16-31 are $1,450 per employee and will be paid on February 3. 31g. Adjust the prepaid asset accounts (for rent and insurance) as needed. 4 4 4 C4-6 Part 5 5-a. Prepare an income statement 5-6. Prepare the statement of retained earnings. 5-c. Prepare the balance sheet. Complete this question by entering your answers in the tabs below. Reg SA Req SB Reg SC Prepare an income statement. FAST DELIVERIES, INC. Income Statement For the Month Ended January 31