Required information

Skip to question

$[$The following information applies to the questions displayed below.$]$

Daily Driver, Incorporated $($DDI$),$ operates a driving service through a popular ride$-$sharing app. DDI has prepared a list of unadjusted account balances at its December $31$ year$-$end. You have reviewed the balances and made notes shown in the right column.

DAILY DRIVER, INCORPORATED

Unadjusted Trial Balance

At December $31$

Account Name Debit Credit Notes

Cash $ $1,600$ This equals the bank balance.

Supplies $170$ Only windshield washer fluid that cost $$30$ remains at December $31.$

Prepaid Insurance $1,800$ This amount was paid January $2$ for car insurance from January $1$ through December $31$ of this year.

Equipment $64,000$ This is the car$$s purchase price.

Accumulated Depreciation $ $3,840$ The car will be two years old at the end of December.

Salaries and Wages Payable $0$ DDI has not yet paid or recorded $$1,040$ of salary for December.

Income Tax Payable $0$ DDI paid all its taxes from last year.

Common Stock $37,000$ DDI issued $7,400$ shares at $$5$ each.

Retained Earnings $6,030$ This is the total accumulated earnings to January $1$ of this year.

Service Revenue $33,970$ All revenue is received in cash when the service is given.

Salaries and Wages Expense $11,200$ DDI$$s only employee receives a salary of $$1,040$ for December.

Supplies Expense $220$ This is the cost of windshield washer fluid used to November $30.$

Depreciation Expense $0$ The car$$s benefits are being used up about $$3,840$ per year.

Insurance Expense $0$ No car insurance has been paid for next year.

Fuel Expense $1,850$ All fuel is paid for in cash.

Income Tax Expense $0$ DDI$$s tax rate is $20\%$ of income before tax.

Totals $ $80,840$ $ $80,840$

Post the beginning balances and adjusting entries to the following T$-$accounts.