Required information

Skip to question

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

Francines Fast Deliveries, Inc. (FFD) was organized in December of 2011. It had limited activity in 2011. The resulting balance sheet at the beginning of 2012 is provided below:

Francines Fast Deliveries, Inc. Balance Sheet at January 1, 2012
Assets:				Liabilities:
Cash	$	2,225		Accounts Payable	$	2,010
Accounts Receivable		1,400		Stockholders Equity:
Supplies		1,200		Common Stock	$	2,000
				Retained Earnings		815
Total Assets	$	4,825		Total Liabilities & Stk. Equity	$	4,825

January Transactions for Francines Fast Deliveries, Inc. (FFD)

Date
1	Owners invest $36,000 of additional cash in the business.
2a	Supplies are purchased for $1,500 on account.
2b	Insurance is paid for 12 months beginning January 1: $9,300 (Record as an asset)
2c	Rent is paid for 3 months beginning in January: $5,400 (Record as an asset)
2d	Two employees are hired. Each employee will be paid $2,130 per month
3	FFD borrows $40,000 from 1st State Bank at 6% annual interest.
6	A delivery van is purchased for cash. Including tax the total cost was $72,000. It will be used for 4 years and will be depreciated monthly using straight-line with no salvage value. A full month of depreciation will be charged in January.
7	$980 of the receivables from Decembers sales are collected.
8	$1,608 of the accounts payable from December are paid.
9	Performed services for customers on account. Mailed invoices totaling $12,000.
10	Services are performed for cash customers: $8,400.
16	Wages for the first half of the month are paid on January 16: $2,130.
20	The company receives $5,000 from a customer for an advance order for services to be provided in January and February.
25	Collections from customers on account (see January 9 transaction): $4,800
30a	The last 2 weeks wages earned by employees are $1,065 per employee and will be paid on February 3.
30b	A $1,355 utility bill for January arrived. It is due on February 15.

Additional Information for adjusting entries at January 31:

a.	Supplies on hand on January 31 total $540.
b.	The company completed 60% of the deliveries for the customer who paid in advance on January 20.
c.	Interest is accrued for the bank loan. (Assume a full month for the 1st State Bank loan.)
d.	Record January depreciation.
e.	Adjust the prepaid asset (Rent and Insurance) accounts as needed.

7.	Prepare end-of-January financial statements. (Balance Sheet only, items to be deducted must be indicated with a negative amount.)