Question

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 $12,600 Accounts Payable $ 700 Accounts Receivable Stockholders' Equity Supplies 720 Common Stock 11,900 Retained Earnings 1,320 Total Assets $13,920 Total Liabilities and stockholders' Equity $13,920 600 Two employees have been hired at a monthly salary of $2.960 each. The following transactions occurred during January of the current year. Ch. January 2 2 2. 2 3 56,000 is paid for 12 months insurance starting January 1. (Record as an asset. $4,800 is paid for 12 months of cont beginning January 1. (Record as an asset.) FDI borrows $30,000 cash from State Bank at 5% annual interest; this note is payable

Answer 1

1. Trial Balance -

FAST DELIVERIES, INC. Unadjusted Trial Balance As on January 31 Cash $ 29,900 Accounts Receivable $ 7,040 Prepaid Insurance $ 4,125 Supplies $ 210 Prepaid Rent $ 3,300 Equipment $ 19,200 Accumulated Depreciation Accounts Payable Deferred Revenue Salaries and Wages Payable Interest Payable Notes Payable (Long term) Common Stock Retained Earnings Service Revenue Salaries and Wages Expense $ 5,800 Supplies Expense $ 1,660 Utilities Expense $ 1,200 Insurance Expenses $ 375 Interest Expense $ 96 Depreciation Expenses $ 400 Rent Expenses $ 300 $ 400 $ 2,300 $ 1,560 $ 2,900 $ 96 $ 28,800 $ 16,410 $ 500 $ 20,640 Total $ 73,606 $ 73,606

2. Ledgers -

Jan 1 Accounts Receivable Beg Bal.$ 740 $ 600 Jan 9 $ 10,500 $ 3,600 Jan 7 Jan 25 Jan 2 Jan 4 Cash Beg Bal. $ 10,900 $ 4,500 Jan 3 $ 28,800 $ 3,600 Jan 5 $ 5,000 $ 19,200 Jan 7 $ 600 $ 500 Jan 10 $ 7,800 $ 2,900 Jan 20 $ 3,900 Jan 25 $ 3.600 Jan 8 End Bal. $ 7,040 Jan 16 Prepaid Insurance Beg Bal. End Bal.$ 29,900 Jan 1 $ 4,500 $ 375 31g. $ 60,600 $ 60,600 $ End Bal. $ 4,125 Supplies 770 $ 1,100 1,660 31b. Beg Bal.$ Jan 6 $ Equipment Beg Bal. Jan 4 $ 19,200 End Bal. $ 210 End Bal.$ 19,200 Prepaid Rent Beg Bal. Jan 2 $ 3,600 $ 300 31g. Beg Bal. Jan 8 Accounts Payable $ 500 $ 500 $ 1,100 $ 1,200 Jan 6 End Bal. $ 3,300 31a. End Bal. $ 2,300 Accumulated Depreciation Beg Bal. $ 400 31e. Notes Payable (Long term) $ 28,800 Beg Bal. Jan 3 End Bal. $ 400 End Bal. $ 28,800 Beg Bal. Deferred Revenue $ 3,900 $ 2,340 Jan 20 31c. Salaries and Wages Payable Beg Bal. $ 2,900 31f. End Bal. $ 1,560 End Bal. $ 2,900 Interest Payable $ 96 Beg Bal. 31d. Retained Earnings $ 500 Beg Bal End Bal. $ 96 End Bal. $ 500 Beg Bal. Common Stock $ 11,410 $ 5,000 Jan 5 Salaries and Wages Expense Beg Bal. Jan 16 $ 2,900 31f. $ 2,900 End Bal. $ 16,410 End Bal.$ 5,800 Beg Bal. Jan 9 Service Revenue $ 10,500 $ 7,800 $ 2,340 Jan 10 31c. Supplies Expense Beg Bal. 31b. End Bal. $ 20,640 $ 1,660 End Bal. $ 1,660 Utilities Expense Beg Bal. 31a. $ 1,200 Insurance Expenses Beg Bal. 31g. End Bal. $ 1,200 $ 375 End Bal.$ 375 Interest Expense Beg Bal. 31d. $ 96 Depreciation Expenses Beg Bal. End Bal. $ 96 31e. $ 400 End Bal. $ 400 Rent Expenses Beg Bal. 31g. $ 300 End Bal.$ 300