C4–6 (continued)
Req. 2
Cash (A) Accounts Receivable (A) Supplies (A) Prepaid Insurance (A)
Beg. 10,900
Beg. 800
Beg. 400
Beg. 0
5,700 (1)
(9)10,400
600 (7)
(6) 1,000
(1) 5,700
4,200 (2)
4,500 (25)
Bal. 1,400
Bal. 5,700
(3) 30,000
24,000 (4)
Bal. 6,100
(5) 6,000
Accum. Depreciation (xA)
(7) 600
(10) 7,600
(20) 3,500
400 (8)
2,200 (16)
Beg. 0
(2) 4,200
Bal. 4,200
Beg. 0
(4) 24,000
Bal. 24,000
0 Beg.
(25) 4,500
Bal. 26,600
Accounts Payable (L)
Interest Payable (L)
500 Beg.
0 Beg.
0 Beg.
0 Beg.
(8) 400
1,000 (6)
3,500 (20)
30,000 (3)
1,100 Bal.
3,500 Bal.
30,000 Bal.
Salaries and Wages
Payable (L)
0 Beg.
11,000 Beg.
600 Beg.
6,000 (5)
17,000 Bal.
Service Revenue (R)
Supplies Expense (E)
0 Beg.
10,400 (9)
7,600 (10)
Beg. 0
(16) 2,200
Bal. 2,200
Beg. 0
Beg. 0
18,000 Bal.
Interest Expense (E)
Depreciation Expense (E)
Beg. 0
Beg. 0
Beg. 0
Beg. 0
C4–6 (continued)
Req. 2 (continued)
FAST DELIVERIES, INC.
Unadjusted Trial Balance
January 31
Account Titles
Debit
Credit
Cash
$ 26,600
Accounts Receivable
6,100
Supplies
1,400
Prepaid Insurance
5,700
Prepaid Rent
4,200
Equipment
24,000
Accumulated Depreciation–Equipment
$ 0
Accounts Payable
1,100
Unearned Revenue
3,500
Notes Payable
30,000
Salaries and Wages Payable
0
Interest Payable
0
Common Stock
17,000
Retained Earnings
600
Service Revenue
18,000
Salaries and Wages Expense
2,200
Supplies Expenses
0
Depreciation Expense
0
Interest Expense
0
Totals
$ 70,200
$ 70,200
C4–6 (continued)
Req. 3
Jan. 31a)
Utilities Expense (+E, –SE)
1,200
Accounts Payable (–A)
1,200
31b)
Supplies Expense (+E, –SE)
1,150
Supplies (–A)
1,150
($1,400 unadjusted – $1,150 AJE = $250 on hand)
31c)
Unearned Revenue (–L)
2,100
Service Revenue (+R, +SE)
2,100
($3,500 x 0.60 = $2,100 now earned)
31d)
Interest Expense (+E, –SE)
150
Interest Payable (+L)
150
($30,000 x .06 x 1/12 = $150)
31e)
Depreciation Expense (+E, –SE)
500
Accumulate Depreciation—Equipment (+xA, –A)
500
($24,000 x ¼ x 1/12 = $500)
31f)
Salaries and Wages Expense (+E, –SE)
2,200
Salaries and Wages Payable (+L)
2,200
31g)
Insurance Expense (+E, –SE)
475
Prepaid Insurance (–A)
475
($5,700 x 1/12 = $475)
Rent Expense (+E, –SE)
350
Prepaid Rent (–A)
350
($4,200 x 1/12 = $475)
C4–6 (continued)
Req. 4
Cash (A) Accounts Receivable (A) Supplies (A) Prepaid Insurance (A)
Bal. 26,600
Bal. 6,100
Bal. 1,400
Bal. 5,700
1,150 (31b)
475 (31g)
Adj. 250
Adj. 5,225
Acc. Depreciation (xA)
Bal. 4,200
Bal. 24,000
0 Beg.
350 (31g)
500 (31e)
Adj. 3,850
500 Adj.
Accounts Payable (L)
Interest Payable (L)
1,100 Bal.
3,500 Bal.
30,000 Bal.
0 Beg.
1,200 (31a)
31c) 2,100
150 (31d)
2,300 Adj.
1,400 Adj.
150 Adj.
Salaries and Wages
Payable (L)
0 Beg.
17,000 Bal.
600 Bal.
2,200 (31f)
2,200 Adj.
Service Revenue (R)
Supplies Expense (E)
18,000 Bal.
2,100 (31c)
Bal. 2,200
(31f) 2,200
Beg. 0
31a) 1,200
Beg. 0
31b) 1,150
20,100 Adj.
Adj. 4,400
Adj. 1,200
Adj. 1,150
Interest Expense (E)
Depn. Expense (E)
Beg. 0
(31d) 150
Beg. 0
(31g) 475
Beg. 0
(31g) 350
Beg. 0
(31e) 500
Adj. 150
Adj. 475
Adj. 350
Adj. 500
C4–6 (continued)
Req. 4 (continued)
FAST DELIVERIES, INC.
Adjusted Trial Balance
January 31
Account Titles
Debit
Credit
Cash
$ 26,600
Accounts Receivable
6,100
Supplies
250
Prepaid Rent
3,850
Prepaid Insurance
5,225
Equipment
24,000
Accumulated Depreciation–Equipment
$ 500
Accounts Payable
2,300
Unearned Revenue
1,400
Salaries and Wages Payable
2,200
Interest Payable
150
Notes Payable
30,000
Common Stock
17,000
Retained Earnings
600
Service Revenue
20,100
Salaries and Wages Expenses
4,400
Utilities Expense
1,200
Supplies Expenses
1,150
Depreciation Expense
500
Insurance Expense
475
Rent Expense
350
Interest Expense
150
Totals
$ 74,250
$ 74,250
C4–6 (continued)
Req. 5
Fast Deliveries, Inc.
Income Statement
For the month ended January 31
Fast Deliveries, Inc.
Statement of Retained Earnings
For the month ended January 31
Service Revenue
$20,100
Retained earnings, beginning of period
$ 600
Expenses
Add: Net Income
11,875
Salaries and Wages
4,400
Less: Dividends
0
Utilities
1,200
Retained earnings, end of period
$ 12,475
Supplies
1,150
Depreciation
500
Insurance
475
Rent
350
Interest
150
Net income
$11,875
Fundamentals of Financial Accounting, 5/e 4–97
© 2016 by McGraw–Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
ANSWERS TO SKILLS DEVELOPMENT CASES
S4–1
1. A
2. D
3. B
S4–2
Req. 1
The Home Depot had $865,000,000 in Advertising Expense whereas Lowe’s had
$811,000,000 in Advertising Expenses for fiscal 2013 (as reported in Note 1).
Req. 2
S4–3
The solutions to this project will depend on the company and/or accounting period
S4–4
Req.1
Q1).
Req. 2
To capitalize an expense is to record its cost as an asset rather than an expense. It is
appropriate to capitalize a cost if it produces a probable future economic benefit.
7.6 M
Bonus Payable (−L) ……………………………………
7.6 M
Bonus Expense (−E,+SE) ……………………
7.6 M
2000 (Q1)
Bonus Expense (+E, −SE) …………………………..
7.6 M
Cash (−A) ………………………………………..
7.6 M