January Transactions for Francine\'s Fast Deliveries, Inc. (FFD) Owners invest $

Question

January Transactions for Francine's Fast Deliveries, Inc. (FFD) Owners invest $22,000 of additional cash in the business. Supplies are purchased for $750 on account. Insurance is paid for 12 months beginning January 1: $6,780 (Record as an asset) Rent is paid for 3 months beginning in January: $3,150 (Record as an asset) Two employees are hired. Each employee will be paid $1,150 per month FFD borrows $25,000 from 1st State Bank at 6% annual interest. A delivery van is purchased for cash. Including tax the total cost was $38,400. 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. $455 of the receivables from December's sales are collected. $692 of the accounts payable from December are paid. Performed services for customers on account. Mailed invoices totaling $9,000. Services are performed for cash customers: $6,300. Wages for the first half of the month are paid on January 16. $1,150. The company receives $2,750 from a customer for an advance order for services to be provided In January and February. Collections from customers on account (see January 9 transaction): $3,600 The last 2 weeks wages earned by employees are $575 per employee and will be paid on February 3. A $725 utility bill for January arrived. It is due on February 15. Additional Information for adjusting entries at January 31: Supplies on hand on January 31 total $375. The company completed 60% of the deliveries for the customer who paid In advance on January 20. Interest Is accrued for the bank loan. (Assume a full month for the 1^st State Bank loan.) Record January depreciation. Adjust the prepaid asset (Rent and Insurance) accounts as needed.

Explanation / Answer

Date Account Head Debit Credit 1 Cash      22,000.00 Capital 22,000.00 2a Supplies            750.00 Accounts Payable        750.00 2b Prepaid Insurance         6,780.00 Cash     6,780.00 2c Prepaid Rent         3,150.00 Cash     3,150.00 2d No entry 3 Cash      25,000.00 Loan 25,000.00 6 Delivery Van      38,400.00 Cash 38,400.00 7 Cash            455.00 Accounts Receivables        455.00 8 Accounts payable            692.00 Cash        692.00 9 Accounts Receivables         9,000.00 Service Revenue     9,000.00 10 Cash         6,300.00 Service Revenue     6,300.00 16 Wages         1,150.00 Cash     1,150.00 20 Cash         2,750.00 Advance From Customers     2,750.00 25 Cash         3,600.00 Accounts Receivables     3,600.00 30a Wages         1,150.00 Wages Outstanding     1,150.00 30b Utitlity Expenses            725.00 Expenses outstanding        725.00 Adjustment Entries a Supplies Consumed            875.00 Supplies        875.00 b Advance From Customers         1,650.00 Servicce Revenue     1,650.00 c Interest Expenses            125.00 Interest Outstanding        125.00 d Depreciation-Delivery Van            800.00 Accumulated Depreciation        800.00 e Rent Expenses         1,050.00 Insurance Expenses            565.00 Prepaid rent     1,050.00 Prepaid Insurance        565.00

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