Question

Gulf Delivery Service, Inc. completed the following transactions during January, 2018:

1Shareholders invested in the business $25,000 cash and a delivery truck valued at $35,000 in exchange for common stock.

2.Purchased supplies for $1,000 cash.

3.Paid $2,400 for a one-year insurance policy, effective January1.

3.Performed delivery services for a customer and received $2,500 cash.

4.Completed a large delivery job for a customer on account for $8,000.

5.Paid $6,000 for employee salaries.

6.Performed delivery services for customers and received $55,000 cash.

7.Collected $4,000 in advance for delivery service to be performed later.

8.Collected $3,000 cash from a customer on account.

9.Purchased fuel for the truck , paying $1,500 with a company credit card (Credit accounts payable).

10.Performed delivery services on account, $4,500.

11.Paid office rent $2,500.

12.Paid $500 for accounts payable.

13.Paid cash dividends of $10,000.

a.

Record each transaction in the journal. Key each transaction by its letter (Explanations are not required).

                            

b.Post the transactions that you recorded in requirement 1 to the ledger accounts using T-accounts. The ledger for Gulf Delivery Service contains the following accounts:

Cash                                                    Service revenue

Accounts receivable                            Salaries expense

Supplies                                               Depreciation expense

Prepaid insurance                                Insurance expense

Delivery truck                                     Fuel expense

Accumulated depreciation                  rent expense

Accounts payable                                supplies expense

Salaries payable                                              

Unearned service revenue

Common stock

Retained earnings

Dividends

Income summary

Answer 1

				In the Books of Gulf Delivery Service
				Journal Entries
a	Particulars					Dr	Cr
Date Jan 2018						Amount	Amount
1	Cash A/C					$25,000
	Delivery Truck					$35,000
	To Common Stock						$60,000
	Being the cash and delivery truck invested in business
	and transferred to common stock
2	Supplies A/C					$1,000
	To Cash						$1,000
	Being the supplies purchased in cash
3	Prepaid Insurance A/C					$2,400
	To Cash						$2,400
	being the one year insurance policy paid effective
	1st January
4	Cash A/C					$2,500
	To Revenue						$2,500
	being the delivery services performed in cash
5	Accounts Receivable A/C					$8,000
	To Revenue						$8,000
	being the large delivery services performed on
	account
6	Salary Expenses A/C					$6,000
	To Cash						$6,000
	being the employee salaries paid
7	Cash A/C					$55,000
	To Revenue						$55,000
	being the delivery services performed in cash
8	Cash A/C					$4,000
	To Unearned Service Revenue						$4,000
	being advance received for services
	to be performed later
9	Cash A/c					$3,000
	To Accounts Receivable						$3,000
	being cash collected on account
10	Fuel Expenses A/C					$1,500
	To Accounts Payable						$1,500
	being the fuel paid for the truck by credit
	card
11	Accounts Receivable A/C					$4,500
	To Revenue						$4,500
	being delivery services performed on account
12	Rent Expenses A/C					$2,500
	To Cash						$2,500
	being the office rent paid
13	Accounts Payable A/C					$500
	To Cash						$500
	being the accounts payable paid
14	Dividends A/C					$10,000
	To Cash						$10,000
	being the cash dividends paid
b	Jan-18
Date	Particulars	Amount	Cash A/C	Date	Particulars		Amount
1	To Common Stock		$25,000	2	By Supplies		$1,000
4	To Revenue		$2,500	3	By Prepaid Insurance		$2,400
7	To Revenue		$55,000	6	By Salary Expenses		$6,000
8	To Unearned Revenue		$4,000	12	By Rent Expenses		$2,500
	Service			13	By Accounts Payable		$500
9	To Accounts Receivable		$3,000	14	By Dividends		$10,000
				31	By Bal C/d		$67,100
			$89,500				$89,500
Date	Particulars	Amount	Common Stock	Date	Particulars		Amount
31	To Bal C/D		$60,000	1	By Cash A/C		$25,000
				1	By Delivery Truck		$35,000
			$60,000				$60,000
Date	Particulars	Amount	Delivery Truck	Date	Particulars		Amount
1	To Common Stock	$35,000		31	By Bal C/D		$35,000
		$35,000					$35,000
Date	Particulars	Amount	Supplies	Date	Particulars		Amount
2	To Cash	$1,000		31	By Bal C/D		$1,000
		$1,000					$1,000
Date	Particulars	Amount	Prepaid Insurance	Date	Particulars		Amount
3	To Cash	$2,400		31	By Bal C/D		$2,400
		$2,400					$2,400
Date	Particulars	Amount	Revenue	Date	Particulars		Amount
				4	By Cash		$2,500
				5	By Accounts Receivable		$8,000
				7	By Cash		$55,000
31	To Bal C/D	$70,000		11	By Accounts Receivable		$4,500
		$70,000					$70,000
Date	Particulars	Amount	Accounts Receivable	Date	Particulars		Amount
5	To Revenue	$8,000		9	By Cash		$3,000
11	To Revenue	$4,500		31	By Bal C/D		$9,500
		$12,500					$12,500
Date	Particulars	Amount	Salary Expense	Date	Particulars		Amount
6	To Cash	$6,000		31	By Bal C/D		$6,000
		$6,000					$6,000
Date	Particulars	Amount	Unearned Service Revenue		Date	Particulars	Amount
31	To Bal C/D	$4,000			8	By Cash	$4,000
		$4,000					$4,000
Date	Particulars	Amount	Fuel Expenses	Date	Particulars		Amount
10	To Accounts Payable	$1,500		31	By Bal C/D		$1,500
		$1,500					$1,500
Date	Particulars	Amount	Rent Expenses	Date	Particulars		Amount
12	To Cash	$2,500		31	By Bal C/D		$2,500
		$2,500					$2,500
Date	Particulars	Amount	Dividends	Date	Particulars		Amount
14	To Cash	$10,000		31	By Bal C/D		$10,000
		$10,000					$10,000
Date	Particulars	Amount	Accounts Payable	Date	Particulars		Amount
13	To Cash	$500		10	By Fuel Expenses		$1,500
31	To Bal C/D	$1,000
		$1,500					$1,500