January 2011 Transactions for Francine’s Fast Deliveries, Inc. (FFD) 1. Owners i

Question

January 2011 Transactions for Francine’s Fast Deliveries, Inc. (FFD)

1. Owners invest $18,000 of additional cash in the business.
2. Supplies are purchased for $1,200
3. Insurance is paid for 6 months beginning January 1: $2,400 (Record as asset)
4. Rent is paid for 2 months beginning in January: $4,500 (Record as an asset)
5. Two employees are hired. Each employee will be paid $2,400 per month
6. FFD borrows $12,000 from 1st State Bank at 12% annual interest.
7. A delivery van is purchased for cash. Including tax the total cost was $10,800. It will be used for 2 years and will be depreciated monthly using straight-line with no salvage value. A full month of depreciation will be charged in January.
7. $1,100 of the receivables from December’s sales are collected.
8. All of the accounts payable from December are paid.
9. Mailed invoices for services performed for customers on account: $9,800.
10. Services are performed for cash customers: $7,200.
11. Wages for the first half of the month are paid on January 16.
12. The company receives $3,600 from a customer for an advance order for services to be provided in January and February.
13. Collections from customers on account (see January 9 transaction): $4,500
14. The last 2 weeks wages earned by employees are $1,200 per employee and will be paid on February 3.
15. A $775 utility bill for January arrived. It is due on February 15.

Explanation / Answer

1. DR cash 18,000 CR equity 18,000 2. DR supplies/inventory 1,200 CR cash 1,200 3. DR prepaid insurance 2,400 CR cash 2,400 4. DR prepaid rent 4,500 CR cash 4,500 5. - 6. DR cash 12,000 CR notes payable 12,000 DR Interest Expense 120 --> (.12/12 * 12,000) CR Cash/Interest payable (no info) 120 7. DR Vehicle 10,800 CR cash 10,800 DR Depreciation Expense 450 --> (10800/24) CR Accumulated Depreciation 450 7. DR Cash 1,100 CR Account Receivables 1,100 8. DR Account Payables (? no info) CR Cash (?) 9. DR Account Receivables 9,800 CR Service Revenue 9,800 10. DR Cash 7,200 CR Service Revenue 7,200 11. DR Wages expense 2,400 CR Cash 2,400 12. DR Cash 3,600 CR Unearned Revenue 3,600 13. DR cash 4,500 CR Account Receivable 4,500 14. DR Wages expense 2,400 CR Wages payable 15. DR Utility expense 775 CR Account Payable 775 Phew.. that's a long one. Hope that helps! :)

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.