Wallys Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows
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Project 1 Review of Accounting Cycle IThe following Information appliles to the questions displayed below.] Francine's 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: Francine's Fast Deliveries, Inc. Balance Sheet at January 1, 2012 Assets: Liabilities: $1,175 Accounts Payable $ 865 Accounts Receivable Supplies 650 Stockholders' Equity: 500 Contributed Capital $1,000 460 Retained Earnings Total Assets $2,325 Liabilities & Stk. Equity $2,325 January Transactions for Francine's Fast Deliveries, Inc. (FFD) Date 1 Owners invest $22,000 of additional cash in the business. 2a Supplies are purchased for $750 on account 2b Insurance is paid for 12 months beginning January 1: $6,780 (Record as an asset) 2c Rent is paid for 3 months beginning in January: $3,150 (Record as an asset) 2d Two employees are hired. Each employee will be paid $1150 per month 3 FFD borrows $25,000 from 1st State Bank at 6% annual interest. 6 A delivery van is purchased for cash. Including tax the total cost was $38,400. 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 $455 of the receivables from December's sales are collected. $692 of the accounts payable from December are paid. Performed services for customers on account. Mailed invoices totaling $9,000. 8 9 10 Services are performed for cash customers: $6,300. 16 Wages for the first half of the month are paid on January 16: $1,150. 20 The company receives $2,750 from a customer for an advance order for services to be provided in January and February. Collections from customers on account (see January 9 transaction): $3,600 The last 2 weeks wages earned by employees are $575 per employee and will be paid on February 3. A $725 utility bill for January arrived. It is due on February 15. 25 30a 30b Additional Information for adjusting entries at January 31: a. Supplies on hand on January 31 total $375. b. The company completed 60% of the deliveries for the customer who paid in advance on January 20 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. References
