Fast Deliveries, Inc. (FDI), was organized in December last year and had limited

Question

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 Accounts Receivable Supplies $11,900 Accounts Payable 700 820 Stockholders' Equitys 650 Common Stock Retained Earninga 11,830 840 Total Assets $13,370 Ttal Liabilities and Stockholders Equity $13,370 Two employees have been hired, at a monthly salary of $2,100 each. The following transactions occurred during January of the current year

Explanation / Answer

Journal entries for the transactions occurred in January Date General Journal Debit Credit 1-Jan Prepaid Insurance $4,200 Cash $4,200 2-Jan Prepaid Rent $3,600 Cash $3,600 3-Jan Cash $30,000 Note Payable $30,000 4-Jan Delivery Van $19,200 Cash $19,200 5-Jan Cash $8,000 Common Stock $8,000 6-Jan Supplies $1,400 Accounts Payable $1,400 7-Jan Cash $800 Accounts Receivable $800 8-Jan Accounts Payable $500 Cash $500 9-Jan Accounts Receivable $11,600 Service Revenue $11,600 10-Jan Cash $7,400 Service Revenue $7,400 16-Jan Salaries Expense $2,100 Cash $2,100 20-Jan Cash $3,700 Unearned Revenue $3,700 25-Jan Cash $3,900 Accounts Receivable $3,900 Adjusting Entries 31-Jan Utilities Expense $1,100 Utilities Payable $1,100 31-Jan Supplies expense $1,790 Supplies $1,790 (650+1400-260) 31-Jan Unearned Revenue $2,340 Service Revenue $2,340 ($3900 x 60% = $2340) 31-Jan Interest expense $100 Interest Payable $100 ($30000 x 0.04 x 1/12 = $100) 31-Jan Depreciation expense $400 Accumulated Depreciation-Delivery Van $400 Cost of Delivery Van $19,200 Annual Depreciation (19200/4) $4,800 Monthly Depreciation (4800/12) $400 31-Jan Salaries Expense $2,100 Salaries Payable $2,100 (1050 x 2 = 2100) 31-Jan Rent Expense $300 Prepaid Rent $300 (3600/12 = 300 per month) 31-Jan Insurance Expense $350 Prepaid Insurance $350 (4200/12 = $350 per month)

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