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 1 Assets: Liabilities: Cash $12,400 Accounts Payable Accounts Receivable Stockholders' Equity! Supplies 510 Common Stock 11,92e Retained Earnings 1,970 Total Assets $13,790 Total Liabilities and Stockholders' Equity $13,790 5 800 880 Two employees have been hired at a monthly salary of $2.020 each. The following transacjons occurred during January of the current year ch 2 2 2 January 1 2 3 4 2 2 2 6 7 $4,200 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.) TDI borrows 536,000 cash from First State Bank at 6% 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 $4,000 of additional cash to FDT for its common stock Additional supplies costing $1,000 are purchased on account and received. $600 of accounts receivable arising from last year's December sales are collected $100 of accounts payable from Decenber of last year are paid Performed services for customers on account. Sent Invoices totaling $11,000 $7,eee of services are performed for customers who paid inmediately in cash $2,620 of salaries are paid for the first half of the month. ERYTOR 10 16 Ch. 4 4 4 January Additional information for adjusting entries: 31a. A $800 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 $300 31c. As of January 31, FDI had completed 6ex of the deliveries for the customer who paid in advance on January 2e. 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 0.86). 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, 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. 31 Salaries earned by employees for the period from January 16-31 are $1,eie per employee and will be paid on February 3. 318 Adjust the prepaid asset accounts (for rent and Insurance) as needed. 4 4 4 C4-6 Part 1 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 1 Assets: Liabilities: Cash $12,400 Accounts Payable Accounts Receivable Stockholders' Equity! Supplies 510 Common Stock 11,92e Retained Earnings 1,970 Total Assets $13,790 Total Liabilities and Stockholders' Equity $13,790 5 800 880 Two employees have been hired at a monthly salary of $2.020 each. The following transacjons occurred during January of the current year ch 2 2 2 January 1 2 3 4 2 2 2 6 7 $4,200 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.) TDI borrows 536,000 cash from First State Bank at 6% 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 $4,000 of additional cash to FDT for its common stock Additional supplies costing $1,000 are purchased on account and received. $600 of accounts receivable arising from last year's December sales are collected $100 of accounts payable from Decenber of last year are paid Performed services for customers on account. Sent Invoices totaling $11,000 $7,eee of services are performed for customers who paid inmediately in cash $2,620 of salaries are paid for the first half of the month. ERYTOR 10 16 Ch. 4 4 4 January Additional information for adjusting entries: 31a. A $800 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 $300 31c. As of January 31, FDI had completed 6ex of the deliveries for the customer who paid in advance on January 2e. 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 0.86). 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, 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. 31 Salaries earned by employees for the period from January 16-31 are $1,eie per employee and will be paid on February 3. 318 Adjust the prepaid asset accounts (for rent and Insurance) as needed. 4 4 4 C4-6