Record Transactions for the month of January. Write journal entries for the info
ID: 2442312 • Letter: R
Question
Record Transactions for the month of January. Write journal entries for the information provided.
January Transactions for Francine’s Fast Deliveries, Inc.
Jan.1 - Owners invest $16,000 of additional cash in the business.
Jan. 2 - a)2Supplies are purchased for $1,000
b) Insurance is paid for 12 months beginning January 1: $5,700 (Record as an asset)
c) Rent is paid for 3 months beginning in January: $4,500 (Record as an asset)
d) Two employees are hired. Each employee will be paid $2,400 per month
Jan. 3 - FFD borrows $30,000 from 1st State Bank at 10% annual interest.
Jan. 6 -A delivery van is purchased for cash. Including tax the total cost was $24,000. 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.
Jan. 7 - $600 of the receivables from December’s sales are collected.
Jan. 8 - $400 of the accounts payable from December are paid.
Jan. 9 - Performed services for customers on account. Mailed invoices totaling $10,400.
Jan. 10 - Services are performed for cash customers: $7,600.
Jan. 16 - Wages for the first half of the month are paid on January 16: $2,400.
Jan. 20 - The company receives $3,500 from a customer for an advance order for services to be provided in January and February.
Jan. 25 -Collections from customers on account (see January 9 transaction): $4,500
Jan. 30 - a)The last 2 weeks wages earned by employees are $1,200 per employee and will be paid on February 3.
b)A $1,200 utility bill for January arrived. It is due on February 15.
Use this additional Information for adjusting entries at January 31:(separate this from the original journal entries)
a) Supplies on hand on January 31 total $250.
b) The company completed 40% 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) Adjust the prepaid asset accounts as needed
e) Record January Depreciation
Explanation / Answer
January Transactions for Francine’s Fast Deliveries, Inc. Jan.1 - Owners invest $16,000 of additional cash in the business. Cash $16,000 Owner’s Capital $16,000 Jan. 2 - a) 2 Supplies are purchased for $1,000 Supplies $1,000 Cash $1,000 b) Insurance is paid for 12 months beginning January 1: $5,700 (Record as an asset) Prepaid Insurance $5,700 Cash $5,700 c) Rent is paid for 3 months beginning in January: $4,500 (Record as an asset) Prepaid Rent $4,500 Cash $4,500 d) Two employees are hired. Each employee will be paid $2,400 per month No Entry Jan. 3 - FFD borrows $30,000 from 1st State Bank at 10% annual interest. Cash $30,000 Bank Loan $30,000 Jan. 6 -A delivery van is purchased for cash. Including tax the total cost was $24,000. 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. Delivery Van $24,000 Cash $24,000 Jan. 7 - $600 of the receivables from December’s sales are collected. Cash $600 Accounts receivables $600 Jan. 8 - $400 of the accounts payable from December are paid. Accounts Payable $400 Cash $400 Jan. 9 - Performed services for customers on account. Mailed invoices totaling $10,400. Accounts receivable $10,400 Service revenue $10,400 Jan. 10 - Services are performed for cash customers: $7,600. Cash $7,600 Service revenue $7,600 Jan. 16 - Wages for the first half of the month are paid on January 16: $2,400. Wages Expense $2,400 Cash $2,400 Jan. 20 - The company receives $3,500 from a customer for an advance order for services to be provided in January and February. Cash $3,500 Unearned Service revenue $3,500 Jan. 25 -Collections from customers on account (see January 9 transaction): $4,500 Cash $4,500 Accounts receivable $4,500 Jan. 30 - a) The last 2 weeks wages earned by employees are $1,200 per employee and will be paid on February 3. Wages Expense $1,200 Wages Payable $1,200 b) A $1,200 utility bill for January arrived. It is due on February 15. Utilities Expense $1,200 Utilities Payable $1,200 Use this additional Information for adjusting entries at January 31:(separate this from the original journal entries) a) Supplies on hand on January 31 total $250. Supplies Expense $750 Supplies $750 b) The company completed 40% of the deliveries for the customer who paid in advance on January 20. Unearned Revenue $1,400 Service revenue $1,400 c) Interest is accrued for the bank loan. (Assume a full month for the 1st State Bank loan.) Interest Expense $250 Interest Payable $250 d) Adjust the prepaid asset accounts as needed Insurance Expense $475 Prepaid Insurance $475 Rent Expense $1,500 Prepaid Rent $1,500 e) Record January Depreciation Depreciation Expense – Delivery Van $500 Accumulated Depreciation – Delivery Van $500
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