Answered Essay: Arab Delivery Service, Inc. completed the following transactions during January, 2017:

Arab Delivery Service, Inc. completed the following transactions during January, 2017:

a.                   Shareholders invested in the business $26,000 cash and a delivery truck valued at $40,000 in exchange for common stock.

b.                  Purchased supplies for $1,200 cash.

c.                   Paid $2,600 for a one-year insurance policy, effective January1.

d.                  Performed delivery services for a customer and received $1,800 cash.

e.                   Completed a large delivery job for a customer on account for $7,000.

f.                   Paid $4,000 for employee salaries.

g.                  Performed delivery services for customers and received $50,000 cash.

h.                  Collected $2,000 in advance for delivery service to be performed later.

i.                    Collected $3,000 cash from a customer on account.

j.                    Purchased fuel for the truck , paying $1,200 with a company credit card (Credit accounts payable).

k.                  Performed delivery services on account, $3,600.

l.                    Paid office rent $2,400.

m.                Paid $1,000 for accounts payable.

n.                  Paid cash dividends of $8,000.

Requirements:

Record each transaction in the journal. Key each transaction by its letter (Explanations are not required).

[14 marks]

Cash                                                    Service revenue

Accounts receivable                            Salary expense

Supplies                                               Depreciation expense

Prepaid insurance                                insurance expense

Delivery truck                                     Fuel expense

Accumulated depreciation                  rent expense

Accounts payable                                supplies expense

Salary payable

Unearned service revenue

Common stock

Retained earnings

Dividends

Income summary

[10 marks]

Prepare a trial balance at January 31 on a worksheet and enter the following adjustments on the worksheet, and complete the workshee.

Accrued but unpaid employee salaries were $2,400.
Depreciation expense for the month was $160.
Prepaid insurance expired, $600.
An inventory count shows $800 of supplies on hand at January 31.
Unearned service revenue earned during January, $1,600.

[16 marks]

Prepare Arab Delivery Service’s income statement and statement of retained earnings for the month ended January 31, 2017, and the classified balance sheet on that date. On the income statement, list expenses in decreasing order by amount – that is, the largest expense first, the smallest expense last.

[12 marks]

Journalize and post the adjusting entries.

[10 marks]

Journalize and post the closing entries.

[10 marks]

Prepare a post-closing trial balance at January 31, 2017.

[3 marks]

 

 

Expert Answer

 

Arab Delivery Service Inc.

Unadjusted Trial Balance

January 31, 2017

Account Titles Debit Credit
$ $
Cash 63,600
Accounts Receivable 7,600
Supplies 1,200
Prepaid Insurance 2,600
Delivery Truck 40,000
Accumulated Depreciation – Delivery Truck 0
Accounts Payable 200
Salary Payable 0
Unearned Service Revenue 2,000
Common Stock 66,000
Retained Earnings 0
Dividends 8,000
Service Revenue 62,400
Salary Expense 4,000
Depreciation Expense 0
Insurance Expense 0
Fuel Expense 1,200
Rent Expense 2,400
Supplies Expense 0
Totals 130,600 130,600

Adjusting Entries:

Account Titles Debit Credit
$ $
January 31, 2017 Salary Expense 2,400
Salary Payable 2,400
January 31, 2017 Depreciation Expense 160
Accumulated Depreciation 160
January 31, 2017 Insurance Expense 600
Prepaid Insurance 600
January 31, 2017 Supplies Expense 400
Supplies 400
January 31, 2017 Unearned Service Revenue 1,600
Service Revenue 1,600

Adjusted Trial Balance

January 31, 2017

Account Titles Debit Credit
$ $
Cash 63,600
Accounts Receivable 7,600
Supplies 800
Prepaid Insurance 2,000
Delivery Truck 40,000
Accumulated Depreciation 160
Accounts Payable 200
Salary Payable 2,400
Unearned Service Revenue 400
Common Stock 66,000
Retained Earnings 0
Dividends 8,000
Service Revenue 64,000
Salary Expense 6400
Depreciation Expense 160
Insurance Expense 600
Fuel Expense 1,200
Rent Expense 2,400
Supplies Expense 400
Totals 133,160 133,160

Closing Entries :

Account Titles Debit Credit
January 31, 2017 $ $
1. Service Revenue 64,000
Income Summary 64,000
2. Income Summary 11,160
Salary Expense 6,400
Depreciation Expense 160
Insurance Expense 600
Fuel Expense 1,200
Rent Expense 2,400
Supplies Expense 400
3. Income Summary 52,840
Retained Earnings 52,840
4. Retained Earnings 8,000
Dividends 8,000

Post Closing Trial Balance

January 31, 2017

Account Titles Debit Credit
$ $
Cash 63,600
Accounts Receivable 7,600
Supplies 800
Prepaid Insurance 2,000
Delivery Truck 40,000
Accumulated Depreciation 160
Accounts Payable 200
Salary Payable 2,400
Unearned Service Revenue 400
Common Stock 66,000
Retained Earnings 44,840
Totals 114,000 114,000
Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?