Question

You decide to open up your very own moving company. After three months of business, you
realize your current accounting system (throwing all your invoices and moving schedules into a
drawer) is no longer working. Additionally, you would like to take out a loan from the bank to
purchase more moving trucks and grow your fleet. In order to do that, you need accurate
financial statements of your company to present to your loan officer.

Record all transactions for your new moving company
1. Record your initial investment of $100,000
2. Record the energy bills (January, February, and March)
3. Record all moving jobs that are listed on your calendar (January, February, and March).
You will record the sale, the contractor expense, and supplies expense for each job.
4. Record the two separate truck purchases and calculate depreciation for January,
February, and March
5. Record the leasing agreement

Any trucks purchased will be depreciated over 12 years with no residual value. Depreciation

is calculated at the end of each month.
• You have a 5 year loan on all the vehicles you purchase and the payment is due the 1st of
every month.
• You pay your movers (you consider them contractors) at $20 per man hour for each moving
job. They are paid at the end of each week. You do not owe payroll taxes on their wages.
• You expense the cost of supplies (boxes, tape, paper) for each job. The supply cost is listed
for each job on the moving calendar.
• You pay your bills on the due date, not when received.
• You take full payment from the customers on the day of the move.

ALL VALUES

Initial Investment 100,000.00 Issued January 2,2018

Dewey Cheatem, & Howe Energy Company

Date 1/31/2018 Due 2/15/2018

Amount Due $665.72

Date 2/28/2018 Due 3/15/2018

Amount Due $845.79

Date 3/31/2018 Due 4/15/2018

Amount Due $795.63

1/4/2018

Sam Smith - charge

$1,500, man hours

12, supplies $200

1/6/2018

Camila Cabello -

charge $300, man

hours 2, supplies $50

1/9/2018

Nicki Minaj - charge

$2,200, man hours

15, supplies $500

1/12/2018

G-Eazy - charge

$400, man hours 2.5,

supplies $50

1/28/2018

Imagine Dragons -

charge $350, man

hours 1.5, supplies $50

2/1/2018

Led Zeppelin -

charge $1,500, man

hours 12, supplies $300

2/4/2018

Pink Floyd - charge

$650, man hours 5,

supplies $50

2/16/2018

Aerosmith - charge

$5,000, man hours

23, supplies $1,000

2/20/2018

The Who - charge

$500, man hours 3,

supplies $50

3/10/2018

Nirvana - charge

$2,000, man hours

18, supplies $300

3/14/2018

Sonic Youth - charge

$300, man hours 1.5,

supplies $50

3/29/2018

Mumford & Sons -

charge $1,500, man

hours 12, supplies $300

1/12/2018

MOVING TRUCKS OF TEXAS, INC.

Description Cost

2015 Isuzu NPR HD Box Truck $ 34,990

2014 Isuzu NPR HD Box Truck $ 35,995

2018 RAM Promaster 3500 Box truck $ 32,495

Total Due $ 103,480

3/23/2018

MOVING TRUCKS OF TEXAS, INC.

2012 Isuzu NPR $ 22,375

2012 Isuzu NPR HD $ 25,950

Total Due $ 48,325

From: Pioneer Leasing

Regarding: Lease Term

Dear You,

This letter is to confirm the new lease terms that have been agreed

upon. You are leasing the office space on 56 North Eldorado Way in

Dallas, Texas 78545 from Pioneer Leasing for a lease term of 5 years

beginning January 1, 20XX. On this date, you will begin paying

monthly rent of $1,000, and this amount will be due on the first of

each month. In addition to the monthly rent, you will pay us a deposit

of $5,000 which will be returned to you once this lease has expired

unless there are any damages to the lease space. We appreciate your

business.

Answer 1

1	Record your initial investment
1/2/2018	Cash	$100,000
	Common Stock		$100,000
2	Record the energy bills
1/31/2018	Utility expenses	$665.72
	Utility payable		$665.72
2/15/2018	Utility Payable	$665.72
	Cash		$665.72
2/28/2018	Utility expenses	$845.79
	Utility payable		$845.79
3/15/2018	Utility Payable	$845.79
	Cash		$845.79
3/31/2018	Utility expenses	$795.63
	Utility payable		$795.63
4/15/2018	Utility Payable	$795.63
	Cash		$795.63
3	Record all moving jobs that are listed on your calendar
1/4/2018	Cash	$1,500
	Sale		$1,500
1/4/2018	Contractor expense (12 x $20)	$240
	Contractor expense payable		$240
1/4/2018	Supplies expenses	$200
	Cash		$200
1/6/2018	Cash	$300
	Sale		$300
1/6/2018	Contractor expense (2 x $20)	$40
	Contractor expense payable		$40
1/6/2018	Supplies expenses	$50
	Cash		$50
1/6/2018	Contractor expense payable	$280
	Cash		$280
1/9/2018	Cash	$2,200
	Sale		$2,200
1/9/2018	Contractor expense (15 x $20)	$300
	Contractor expense payable		$300
1/9/2018	Supplies expenses	$500
	Cash		$500
1/12/2018	Cash	$400
	Sale		$400
1/12/2018	Contractor expense (2.5 x $20)	$50
	Contractor expense payable		$50
1/12/2018	Supplies expenses	$50
	Cash		$50
1/13/2018	Contractor expense payable	$350
	Cash		$350
1/28/2018	Cash	$350
	Sale		$350
1/28/2018	Contractor expense (1.5 x $20)	$30
	Contractor expense payable		$30
1/28/2018	Supplies expenses	$50
	Cash		$50
2/1/2018	Cash	$1,500
	Sale		$1,500
2/1/2018	Contractor expense (12 x $20)	$240
	Contractor expense payable		$240
2/1/2018	Supplies expenses	$300
	Cash		$300
2/3/2018	Contractor expense payable	$270
	Cash		$270
2/4/2018	Cash	$650
	Sale		$650
2/4/2018	Contractor expense (5 x $20)	$100
	Contractor expense payable		$100
2/4/2018	Supplies expenses	$50
	Cash		$50
2/10/2018	Contractor expense payable	$100
	Cash		$100
2/16/2018	Cash	$5,000
	Sale		$5,000
2/16/2018	Contractor expense (23 x $20)	$460
	Contractor expense payable		$460
2/16/2018	Supplies expenses	$1,000
	Cash		$1,000
2/20/2018	Cash	$500
	Sale		$500
2/20/2018	Contractor expense (3 x $20)	$60
	Contractor expense payable		$60
2/20/2018	Supplies expenses	$50
	Cash		$50
2/24/2018	Contractor expense payable	$520
	Cash		$520
3/10/2018	Cash	$2,000
	Sale		$2,000
3/10/2018	Contractor expense (18 x $20)	$360
	Cash		$360
3/10/2018	Supplies expenses	$300
	Cash		$300
3/14/2018	Cash	$300
	Sale		$300
3/14/2018	Contractor expense (1.5 x $20)	$30
	Contractor expense payable		$30
3/14/2018	Supplies expenses	$50
	Cash		$50
3/17/2018	Contractor expense payable	$30
	Cash		$30
3/29/2018	Cash	$1,500
	Sale		$1,500
3/29/2018	Contractor expense (12 x $20)	$240
	Contractor expense payable		$240
3/29/2018	Supplies expenses	$300
	Cash		$300
3/31/2018	Contractor expense payable	$240
	Cash		$240
4	Record the two separate truck purchases and calculated depreciation for Jan, feb and March
1/12/2018	Moving trucks	$103,480
	Long term Loan		$103,480
3/23/2018	Moving Trucks	$48,325
	Long term loan		$48,325
1/31/2018	Depreciation expense	$718.61
	Accumulated Depreciation		$718.61
	(Full month depreciation is charged)
2/28/2016	Depreciation expense	$718.61
	Accumulated Depreciation		$718.61
3/31/2018	Depreciation expense	$718.61
	Accumulated Depreciation		$718.61
	Depreciation is not charged on second purchase as it put to use in last week of March
2/1/2018	Long term loan	$1,724.67
	Cash		$1,724.67
	(Loan installment paid)
3/1/2018	Long term loan	$1,724.67
	Cash		$1,724.67
5	Record the leasing agreement
1/1/2018	Refundable Deposit	$5,000
	Cash		$5,000
1/1/2018	Rent expense	$1,000
	Cash		$1,000
2/1/2018	Rent expense	$1,000
	Cash		$1,000
3/1/2018	Rent expense	$1,000
	Cash		$1,000