Delivery Service completed the following transactions during DecemberDecember LOADING... Requirement 1. Record each transaction in the journal. Explanations are not required. (Record
debits first, then credits. Exclude explanations from journal entries.) Dec.Dec. 1: MicronMicron Delivery Service began operations by receiving $ 16 comma 000$16,000 cash and a truck with a fair value of $ 9 comma 000$9,000 from RipleyRipley MicronMicron. The business gave MicronMicron capital in exchange for this contribution. Date
Dec. 1
Accounts
Debit
Cash
16,000
Truck
9,000
Micron, Capital
Credit
25,000
Dec.Dec. 1: Paid $ 600$600 cash for a sixsix-month insurance policy. The policy begins DecemberDecember 1. Date
Dec. 1
Accounts
Prepaid Insurance
Debit
Credit
600
Cash
600
Dec.Dec. 4: Paid $ 750$750 cash for office supplies. Date
Dec. 4
Accounts
Office Supplies Cash
Debit
Credit
750 750
Dec.Dec. 12: Performed delivery services for a customer and received $ 1 comma 500$1,500 cash. Date
Dec. 12
Accounts
Cash
Debit
Credit
1,500
Service Revenue
1,500
Dec.Dec. 15: Completed a large delivery job, billed the customer, $ 2 comma 700$2,700, and received a promise to collect the $ 2 comma 700$2,700 within one week. Date
Dec. 15
Accounts
Accounts Receivable
Debit
Credit
2,700
Service Revenue
2,700
Dec.Dec. 18: Paid employee salary, $ 1 comma 200$1,200. Date
Dec. 18
Accounts
Salaries Expense
Debit
Credit
1,200
Cash
1,200
Dec.Dec. 20: Received $ 7 comma 000$7,000 cash for performing delivery services. Date
Dec. 20
Accounts
Cash Service Revenue
Debit
Credit
7,000 7,000
Dec.Dec. 22: Collected $ 1 comma 700$1,700 in advance for delivery service to be performed later. Date
Dec. 22
Accounts
Cash
Debit
Credit
1,700
Unearned Revenue
1,700
Dec.Dec. 25: Collected $ 2 comma 700$2,700 cash from customer on account. Date
Dec. 25
Accounts
Cash
Debit
Credit
2,700
Accounts Receivable
2,700
Dec.Dec. 27: Purchased fuel for the truck, paying $ 200$200 on account. (Credit Accounts Payable) Date
Dec. 27
Accounts
Fuel Expense
Debit
Credit
200
Accounts Payable
200
Dec.Dec. 28: Performed delivery services on account, $ 1 comma 300$1,300. Date
Dec. 28
Accounts
Accounts Receivable Service Revenue
Debit
Credit
1,300 1,300
Dec.Dec. 29: Paid office rent, $ 2 comma 300$2,300, for the month of DecemberDecember. Date
Dec. 29
Accounts
Rent Expense
Debit
Credit
2,300
Cash
2,300
Dec.Dec. 30: Paid $ 200$200 on account. Date
Dec. 30
Accounts
Accounts Payable
Debit
Credit
200
Cash
200
Dec.Dec. 3131: MicronMicron withdrew cash of $ 2 comma 600$2,600. Date
Dec. 31
Accounts
Micron, Withdrawals Cash
Debit
Credit
2,600 2,600
Post the transactions to the T-accounts. Use the transaction dates as posting references. Use a "Bal." posting reference to show the ending balance of each account. For any accounts with a zero balance, select the "Bal." posting reference and enter a "0" on the normal side of the account. Review the journal entries you prepared above. LOADING... Cash
Dec. 1
16,000
Accounts Payable
600 Dec. 1
Dec. 30
200
200
Service Revenue
Dec. 27
750 Dec. 4 Dec. 12
1,500
1,200
Dec. 18
Dec. 20
7,000
2,300
Dec. 29
Dec. 22
1,700
200
Dec. 30
Dec. 25
2,700
2,600
Dec. 31
Bal.
21,250
0 Bal.
2,700
0 Bal.
Dec. 28
1,300
Bal.
1,300
2,700
Dec. 12
2,700
Dec. 15
7,000
Dec. 20
1,300
Dec. 28
Salaries Payable
Accounts Receivable
Dec. 15
1,500
12,500 Bal.
Unearned Revenue
Dec. 25
Dec. 22
Dec. 18
1,200
1,700 Bal.
Bal.
1,200
1,700
Office Supplies
Micron, Capital
Dec. 4
750
25,000 Dec. 1
Bal.
750
25,000 Bal.
Prepaid Insurance
Salaries Expense
Depreciation Expense—Truck
Bal.
Micron, Withdrawals
Dec. 1
600
Dec. 31
2,600
Bal.
600
Bal.
2,600
0
Insurance Expense
Bal.
0
Truck
Income Summary
Fuel Expense
Dec. 1
9,000
Dec. 27
200
Bal.
9,000
Bal.
200
Accumulated Depreciation— Truck
0 Bal.
Rent Expense
Dec. 29
2,300
Bal.
2,300
Supplies Expense
Bal.
0
Requirement 3. Prepare an unadjusted trial balance as of
DecemberDecember 3131, 20162016. (Exclude any accounts with a zero balance from the trial balance.) Review the T-accounts you prepared in Requirement 1. LOADING... Micron Delivery Service Unadjusted Trial Balance December 31, 2016 Balance Account Title
Debit
Cash
Credit
$21,250
Accounts Receivable
1,300
Office Supplies
750
Prepaid Insurance
600
Truck
9,000
Unearned Revenue
$1,700
Micron, Capital
25,000
Micron, Withdrawals
2,600
Service Revenue
12,500
Fuel Expense
200
Rent Expense
2,300
Salaries Expense
1,200
Total
$39,200
$39,200
Requirement 4. Journalize the adjusting entries using the adjustment data. Post adjusting entries to the T-accounts. Begin by preparing the adjusting entries. (Record debits first, then credits. Exclude explanations from journal entries.) a. Accrued Salaries Expense, $ 1 comma 200$1,200. Date
Accounts
Dec. 31
Salaries Expense
Adj. (a)
Salaries Payable
Debit
Credit
1,200 1,200
b. Depreciation was recorded on the truck using the straight-line method. Assume a useful life of fivefive years and a salvage value of $ 3 comma 000$3,000. Date
Accounts
Dec. 31
Depreciation Expense—Truck
Adj. (b)
Accumulated Depreciation—Truck Depreciation—Truck
Debit
Credit
100 100
c. Prepaid Insurance for the month has expired. Date
Accounts
Dec. 31
Insurance Expense
Adj. (c)
Prepaid Insurance
Debit
Credit
100 100
d. Office supplies on hand,
$ 500$500. Date
Accounts
Dec. 31
Supplies Expense
Adj. (d)
Office Supplies
Debit
Credit
250 250
e. Unearned Revenue earned during the month, $ 500$500. Date
Accounts
Dec. 31
Unearned Revenue
Adj. (e)
Service Revenue
Debit
Credit
500 500
Revenu e, f. Accrued Service Revenue, $ 850$850. Date
Accounts
Dec. 31
Accounts Receivable
Adj. (f)
Service Revenue
Debit
Credit
850 850
Post the adjusting entries to the T-accounts. The unadjusted balances of the accounts ("Bal.") have been entered for you. Use the adjustment and corresponding letters as posting referenceslong dash—"Adj. (a)", "Adj. (b)", etc. Use a "Bal." posting reference on the last line of each T-account to show the adjusted balance of each account. For any accounts with a zero balance, select the "Bal." posting reference and enter a "0" on the normal side of the account. Cash
Bal.
Bal.
Accounts Payable
21,250
Service Revenue
0 Bal.
21,250
12,500 Bal.
0 Bal.
500
Adj. (e)
850
Adj. (f)
13,850 Bal. Salaries Payable
0 Bal. 1,200
Adj. (a)
1,200 Bal.
Accounts Receivable
Bal.
1,300
Adj. (f)
850
Bal.
2,150
Unearned Revenue
Adj. (e)
500
1,700 Bal.
1,200 Bal.
Salaries Expense
Bal.
1,200
Adj. (a)
1,200
Bal.
2,400
Office Supplies
Bal.
Bal.
750
250
Micron, Capital
Adj. (d)
25,000 Bal.
500
25,000 Bal.
Prepaid Insurance
Bal.
Bal.
600
100
Adj. (c)
500
Bal.
0
Adj. (b)
100
Bal.
100
Micron, Withdrawals
Bal.
Bal.
Truck
Depreciation Expense—Truck
2,600
2,600
Insurance Expense
Bal.
0
Adj. (c)
100
Bal.
100
Income Summary
Fuel Expense
Bal.
9,000
Bal.
200
Bal.
9,000
Bal.
200
Accumulated Depreciation— Truck
0 Bal. 100
Rent Expense
Bal.
2,300
Bal.
2,300
Adj. (b)
100 Bal.
Supplies Expense
Bal.
0
Adj. (d)
250
Bal.
250
Requirement 5. Prepare an adjusted trial balance as of
DecemberDecember 3131, 20162016. Micron Delivery Service Adjusted Trial Balance December 31, 2016 Balance Account Title
Cash Accounts Receivable
Debit
Credit
$21,250 2,150
Office Supplies
500
Prepaid Insurance
500
Truck
9,000
Accumulated Depreciation—Truck Depreciation—Truck Insurance Expense
$100 100
Salaries Payable
1,200
Unearned Revenue
1,200
Micron, Capital Micron, Withdrawals
25,000 2,600
Service Revenue
13,850
Rent Expense
2,300
Salaries Expense
2,400
Supplies Expense
250
Fuel Expense
200
Depreciation Expense—Truck
100
Total
$41,350
$41,350
Requirement 6. Prepare
MicronMicron Delivery Service's income statement and statement of owner's equity for the month ended DecemberDecember 3131, 20162016, and the classified balance sheet on that date. On the income statement, list expenses in decreasing order by amountlong dash—that is, the largest expense first, the smallest expense last. Begin by preparing the income statement. List expenses in decreasing order by amountlong dash—that is, the largest expense first, the smallest expense last. Review the Adjusted Trial Balance completed in Requirement 5. LOADING... Micron Delivery Service Income Statement Month Ended December 31, 2016
Revenues: Service Revenue
$13,850
Expenses: Salaries Expense Rent Expense
$2,400 2,300
Supplies Expense
250
Fuel Expense
200
Insurance Expense
100
Depreciation Expense—Truck
100
Total Expenses Net Income (Loss)
5,350 $8,500
Prepare the statement of owner's equity. Enter any increases in capital prior to the subtotal and any decreases to capital below the subtotal. (Enter a "0" for any zero balances. Use a minus sign or parentheses to show a decrease in retained earnings.) Review the Adjusted Trial Balance completed in Requirement 5. LOADING... Micron Delivery Service Statement of Owner's Equity Month Ended December 31, 2016
Micron, Capital, December 1, 2016 Owner contribution Net income for the month
$0 25,000 8,500 $33,500
Owner withdrawal
(2,600)
Micron, Capital, December 31, 2016
$30,900
Prepare MicronMicron Delivery Service's classified balance sheet on DecemberDecember 3131, 20162016. (Exclude any zero balance accounts from the balance sheet.) Review the Adjusted Trial Balance completed in Requirement 5. LOADING... Micron Delivery Service Balance Sheet December 31, 2016 Assets
Current Assets: Cash
$21,250
Accounts Receivable
2,150
Office Supplies
500
Prepaid Insurance
500
Total Current Assets
$24,400
Plant Assets: Truck
9,000
Less: Accumulated Depreciation—Truck Depreciation—Truck
(100)
Total Plant Assets
8,900
Total Assets
$33,300 Liabilities
Current Liabilities: Liabilities: Salaries Payable
$1,200
Unearned Revenue
1,200
Total Liabilities
2,400 Owner's Equity
Micron, Capital Total Liabilities and Owner's Equity
30,900 $33,300
Requirement 7. Journalize the closing entries and post to the T-accounts.
Begin by journalizing the closing entries. (Record debits first, then credits. Exclude explanations from journal entries.) Start by closing revenues. Date
Accounts
Dec. 31
Service Revenue
Clos. (1)
Income Summary
Debit
Credit
13,850 13,850
Close expenses for the period. Review the Adjusted Trial Balance completed in Requirement 5. LOADING... Date
Accounts
Debit
Credit
Dec. 31
Income Summary
5,350
Clos. (2)
Fuel Expense
200
Insurance Expense
100
Rent Expense
2,300
Salaries Expense
2,400
Supplies Expense
250
Depreciation Expense—Truck
100
Close Income Summary. Review the Adjusted Trial Balance completed in Requirement 5. LOADING... Date
Accounts
Dec. 31
Income Summary
Clos. (3)
Micron, Capital
Debit
Credit
8,500 8,500
Close withdrawals. Review the Adjusted Trial Balance completed in Requirement 5. LOADING... Date
Accounts
Dec. 31
Micron, Capital
Clos. (4)
Micron, Withdrawals
Debit
Credit
2,600 2,600
Post the closing entries to the T-accounts. Use "Clos." and the corresponding number as shown in the journal entry as posting referenceslong dash—"Clos.(1)", "Clos.(2)", etc. The adjusted balance of each account has been entered for you. Post any closing entries to the accounts and then calculate the post-closing balance ("Bal.") of each account (including those that were not closed). For any accounts with a zero balance after closing, enter a"0" on the normal side of the account. For Income Summary, calculate and enter the balance ("Bal.") before posting the entry to close out the account. Post the entry to close Income Summary account on the same line as you entered the balance prior to closing (the second line) and then show the post-closing balance ("Bal.") on the last (third) line of the account. Review the closing journal entries you prepared above. LOADING... Cash
Accounts Payable
Bal.
21,250
0 Bal.
Bal.
21,250
0 Bal.
Service Revenue
Clos.(1)
13,850
13,850 Bal. 0 Bal.
Salaries Payable
1,200 Bal. 1,200 Bal.
Accounts Receivable
Unearned Revenue
Salaries Expense
Bal.
2,150
1,200 Bal.
Bal.
2,400
Bal.
2,150
1,200 Bal.
Bal.
0
Office Supplies
Bal.
500
Bal.
500
Micron, Capital
Clos.(4)
2,600
25,000 Bal. 8,500 Clos.(3)
2,400 Clos.(2)
Depreciation Expense—Truck
Bal.
100
Bal.
0
100 Clos.(2)
30,900 Bal.
Prepaid Insurance
Micron, Withdrawals
Bal.
500
Bal.
2,600
Bal.
500
Bal.
0
2,600 Clos.(4)
Insurance Expense
Bal.
100
Bal.
0
100 Clos.(2)
Truck
Income Summary
Bal.
9,000
Clos.(2)
5,350
Bal.
9,000
Clos.(3)
8,500
Fuel Expense
13,850 Clos.(1) 8,500 Bal.
Bal.
200
Bal. Bal.
0
200 Clos.(2)
0 Bal. Accumulated Depreciation—Truck
Rent Expense
100 Bal.
Bal.
2,300
100 Bal.
Bal.
0
2,300 Clos.(2)
Supplies Expense
Bal.
250
Bal.
0
250 Clos.(2)
Requirement 8. Prepare a post-closing trial balance. (Exclude any permanent accounts with a
zero balance from the post-closing trial balance.) Review the T-accounts you prepared in Requirement 7. LOADING... Micron Delivery Service Post-Closing Trial Balance December 31, 2016 Balance Account Title
Cash Accounts Receivable
Debit
Credit
$21,250 2,150
Office Supplies
500
Prepaid Insurance
500
Truck
9,000
Accumulated Depreciation—Truck Depreciation—Truck
$100
Salaries Payable
1,200
Unearned Revenue
1,200
Micron, Capital Total
30,900 $33,400
$33,400
