The chart of accounts of Aikman's Delivery Service is as follows: Chart of Accounts Assets Cash 111

Question:

The chart of accounts of Aikman's Delivery Service is as follows:

Chart of Accounts

Assets

Cash 111

Accounts Receivable 112

Office Equipment 121

Delivery Trucks 122

Liabilities

Accounts Payable 211

Owner's Equity

Andrea Aikman, Capital 311

Andrea Aikman, Withdrawals 312

Revenue

Delivery Fees Earned 411

Expenses

Advertising Expense 511

Gas Expense 512

Salaries Expense 513

Telephone Expense 514

Aikman's Delivery Service completed the following transactions during the month of May:

A. Andrea Aikman invested $20,000 in the delivery service from her personal savings account.

B. Bought delivery trucks on account, $13,000.

C. Bought office equipment for cash, $1,500.

D. Paid advertising expense, $450.

E. Collected cash for delivery services rendered, $2,600.

F. Paid drivers' salaries, $700.

G. Paid gas expense for trucks, $900.

H. Performed delivery services for a customer on account, $1,700.

I. Telephone expense due but unpaid, $500.

J. Received $900 as partial payment of transaction H.

K. Andrea withdrew cash for personal use, $200.

As Andrea's newly hired accountant, you must perform the following:

1. Set up T accounts using the chart of accounts. Record transactions in the

T accounts. (Place the letter of the transaction next to the entry.)

2. Foot the T accounts where appropriate and determine the ending balances.

3. Prepare a trial balance at the end of May.

4. Prepare from the trial balance, in proper form,

(a) An income statement for the month of May,

(b) A statement of owner's equity,

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...