Part (B): Accounting Cycle Comprehensive Problem
[75 marks in total]
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.
1. Record each transaction in the journal. Key each transaction by its letter (Explanations are not required).
2. Post the transactions that you recorded in requirement 1 to the ledger accounts using T-accounts. The ledger for Arab Delivery Service contains the following accounts:
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
Unearned service revenue
3. Prepare a trial balance at January 31 on a worksheet and enter the following adjustments on the worksheet, and complete the worksheet.
a. Accrued but unpaid employee salaries were $2,400.
b. Depreciation expense for the month was $160.
c. Prepaid insurance expired, $600.
d. An inventory count shows $800 of supplies on hand at January 31.
e. Unearned service revenue earned during January, $1,600.
4. 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.
5. Journalize and post the adjusting entries.
6. Journalize and post the closing entries.
7. Prepare a post-closing trial balance at January 31, 2017.
We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.Read more
The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.Read more
The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.Read more
By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.Read more