Reference no: EM132659700
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
Assets: Liabilities:
Cash$1,025
Accounts Payable$525
Accounts Receivable 550
Stockholders' Equity:
Supplies 350
Common Stock$1,000
Retained Earnings 400
Total Assets$1,925 Total
Liabilities & Stk. Equity$1,925
January Transactions for Francine's Fast Deliveries, Inc. (FFD)
Date 1 Owners invest $20,000 of additional cash in the business.
2a Supplies are purchased for $650 on account.
2b Insurance is paid for 12 months beginning January 1: $6,420 (Record as an asset)
2c Rent is paid for 3 months beginning in January: $2,850 (Record as an asset)
2d Two employees are hired. Each employee will be paid $1,010 per month3 FFD borrows $23,000 from 1st State Bank at 6% annual interest.
6 A delivery van is purchased for cash. Including tax the total cost was $33,600. 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 $385 of the receivables from December's sales are collected.8 $420 of the accounts payable from December are paid.9 Performed services for customers on account. Mailed invoices totaling $8,600.
10 Services are performed for cash customers: $6,020.
16 Wages for the first half of the month are paid on January 16: $1,010.
20 The company receives $2,450 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): $3,44030a The last 2 weeks wages earned by employees are $505 per employee and will be paid on February 3.
30b A $635 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 $200.
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.
Question 1: Prepare the adjusted trial balance, using the revised set of t-account balances.