In: Accounting
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 |
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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 Francine’s 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 December’s 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. |
6. | Prepare the adjusted trial balance, using the revised set of t-account balances. |