‘Student: Amanda Shepherd Date: 7/8/16 1 “(Click the icon to view the transaction: Read the requirements” Instructor: Shauna Hatfield Course: ACCT 1110 Summer 2016 12- wk. Online (1) 8) Assignment: Acctg Cycle Problem on MAL Murphy Delivery Service completed the following transactions during December 2016: Requirement 1. Record each transaction in the journal. Explanations are not required. (Record debits first, then credits Exclude explanations from journal entries.) Dec. 1: Murphy Delivery Service began operations by receiving $14,000 cash and a truck with a fair value of $8,000 from Radley Murphy. The business gave Murphy capital in exchange for this contribution. Date | Accounts. Debit | Credit Dee. 1 =e | | Truck } | murphy, Capita 7 | Dec. 1: Paid $600 cash fora six-month insurance policy. The policy begins December 4 Date | Accounts, [_Debit | Credit _ Dee. 1 Prepaid Insurance | 600 | cash | 600 | | | | | Dec. 4: Paid $650 cash for office supplies. Date | Accounts Debit | _Croait ‘Dec. 4 | Office Supplies 650 Cash 650 | | I I Dec. 12: Performed delivery services for a customer and received $1,500 cash. Date ‘Accounts Debit Credit Dee. 12 Cash - 1,500 Service Revenue | 1.800 Dec. 15: Completed a large delivery job, billed the customer, $2,700, and received a promise to collect the $2,700 within ‘one weekDate Accounts Debit || Credit Dec. 18 ‘Accounts Receivable 2,700 | Service Revenue 2,700 \ Dec. 18: Paid employee salary, $1,100. _Date Accounts Debit || Credit Dec. 18 _| Salaries Expense : "4,100 Gash 4,100 Dec. 20: Received $7,000 cash for performing delivery services. Date __ Accounts |_ Debit Credit Dec. 20 Cash 7,000 | z | Service Revenue | 7,000 | Dee. 22: Collected $2.200 in advance for delivery service to be performed later. Date 5 Accounts Debit || _Creait Dec. 22 Cash [2.200 Uneamned Revenue 2,200 | 1 l Dec. 25: Collected $2,700 cash from customer on account. vate | Accounte [peor _||_eroae Dec. 25 Cash 2,700 Accounts Receivable l | 2,700 Dec. 27: Purchased fuel for the truck, paying $400 on account. (Credit Accounts Payable) Date Accounts ‘Dec. 27 Fuel Expense ‘Accounts Payable Dec. 28: Performed delivery services on account, $1,800.Date Accounts Debit Credit Dec. 28 Accounts Receivable 4,800 | Service Revenue 1,800 Dec. 29: Paid office rent, $1,200, for the month of December. Date _| Accounts Debit || Credit Dee. 29 Rent Expense | cash 4.200 Deo. 30: Paid $400 on account. Date _Accounts Dec. 30 _| Accounts Payable Cash Dec. 31: Murphy withdrew cash of $3,100, Accounts Debit Credit cae ue Dec. 31 Murphy, Withdrawals, 3,100 Cash 3,100 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 20" on the normal side of the account view ialcash Accounts Payable Service Revenue Dec1 14,000] 600 Dec.1 Dec. 30 400/400 Dec. 27 1,500 Dec. 12 Dec. 12 1,500] 650 Dec. 4 2,700 Dec. 15 Dec.20 7,000] 1,100 Dec. 18 0 7,000 Dec. 20 Dec. 22 2,200) 1,200 Dec. 29 1,800 Dec. 28 Dec.25 2,700} 400 Dec. 30 Salaries Payable 3,100 Dec. 31 Bal. 20,350 0 Bal 13,000 Bal Accounts Receivable Uneamed Revenue Salaries Expense Dec.18 2,700] 2,700 Dec. 25 2,200 Dec.22 Dec. 18 1,100 Dec. 28 1,800 Bal 4,800 2,200 Bal Bal 4,400 Office Supplies ‘Murphy, Capital Depreciation Expense—Truck Deo. 4 650 22,000 Dec. 1 Bal. 650 22,000 Bal Bal 0 Prepaid insurance Murphy, Withdrawals Insurance Expense Deo. 1 600 Dec.31 3,100 Bal 600 Bal 3,100 Bal o Truck Income Summary Fuel Expense Dect 8,000 Dec.27 400 Bal 8,000 Bal 400 fe wocemteted Deprecestion— Truck ont Exper: Dec.28 1,200 0 Bal Bal 4,200 Supplies Expense Bal 0 Requirement 3. Prepare an unadjusted trial balance as of December 31, 2016. (Exclude any accounts with a zero balance from the trial balance.) ‘Review the T-accounts you prepared in Requirement 1,Murphy Dolivery Service Unadjusted Trial Balance December 31, 2016 Account Title Cash s Accounts Receivable Office Supplies Prepaid Insurance Truck Unearmed Revenue ‘Murphy, Capital Murphy, Withdrawals Service Revenue Salaries Expense Fuel Expense Rent Expense Total Balance Debit 20,350 1,800 650 600 8,000 3,100 4,100 400 Credit $ 2,200 22,000 13,000 4,200 $__ 37,200 $_37,200 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.) 1. Accrued Salaries Expense, $1,100. Date __| sl | __Accounts_ Debit | _Credit Dec. 31 _| Salaries Expense 1,100 | Adi. (2) Selaries Payable 41,100 'b, Depreciation was recorded on the truck using the straight-line method. Assume a useful life of five years and a salvage value ‘of $2,000. Date _ es Accounts Debit Credit Dec.31 | Depreciation Expense—Truck | 100] i Adj. (b) Accumulated Depreciation—Truck } | 100 | 1 .e. Prepaid Insurance for the month has expired. Date | Accounts Debit Credit Deo. 31 ee q 100 Adj. (6) Prepaid Insurance 100°4. Office supplies on hand, $50. Date aed Debit _||_creatt_ ‘Dec. 31 Supplies Expense | 600) Adi (@) —||-_ Office Supplies | cao} e. Unearned Revenue eared during the month, $500. Date Accounts _ | pei | creat Dec. 31 Uneamed Revenue | _ 500] . Ad. (0) Service Revenue | 500 f. Accrued Service Revenue, $1,250. pate esate |__beott Dee. 31 ‘Acoounts Receivable “4,250 Adj. (f) Service Revenue 7} 1,250 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 references—'Adj. (a)", “Adj. (b)", etc. Use "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. the jour ve.Cash Accounts Payable Service Revenue Bal 20,360 0 Bal 13,000 Bal. 500 Adj. (¢) Bal 20,850 0 Bal 4.250 Adj. (0 14,750 Bal Salaries Payable opal 1.400. Adi.) 7,400 Bat Accounts Receivable Unoarned Revenue Salaries Expense Bal. 1,800} Adj. (e) 500, 2,200 Bal. Bal. 1,100} Adj () 1.250 Ad.(@) "1,100 Bal 3,050 4700 Bal Bal 2,200 Office Supplies Murphy, Capital Depreciation Expense—Truck Bal 50] 600 Adi (6) 22,000Bal. ‘Bal q Adi.(o) 100 Bal 50 22,000 Bal ‘Bal 00 Prepaid Insurance Murphy, Withdrawale Insurance Expense Bal. 600) 100 Adj. (¢) Bal. 3,100} Bal. Q| Adit) 100 Bal 500 Bal 3.400 Bal 700 Truck Income Summary Fuol Expense Bal 2,000 Bal 409 Bal 8,000 “Bal 400 Accumulated Depreciation—Truck Rent Expense 0 Bal. Bal. 1,200] 100 Ad.) 100 Bal Bal 11200 Supplies Expense Bal. 0 Ad.(s) 600 Bal 600 Requirement 5. Prepare an adjusted trial balance as of December 31, 2016. (Exclude any zero balance accounts from the ‘adjusted trial balance.) eview the Ta Re nt 4,Murphy Delivery Service Adjusted Trial Balance December 31, 2016 Balance Account Title Debit Credit Cash $ 20,350 Accounts Receivable 3,050 Office Supplies: 50 Prepaid insurance 500 Truck 8,000 ‘Accumulated Depreciation—Truck s 100 Salaries Payable 1,100 Unearned Revenue 1,700 Murphy, Capital 22,000 Murphy, Withdrawals 3,100 Service Revenue 14,750 Salaries Expense 2,200 Depreciation Expense—Truck 100 Insurance Expense 100 Fuel Expense 400 Rent Expense 4.200 Supplies Expense 00 Total 530,650 $ 39,660 Requirement 6. Prepare Murphy Delivery Service's income statement and statement of owner's equity for the month ended December 31, 2016, 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. ‘Begin by preparing the income statement. List expenses in decreasing order by amount—thatis, the largest expense fist, the ‘smallest expense last. Bs Adjusted Trial Bal‘Murphy Delivery Service Income Statement ‘Month Ended December 31, 2016 Revenues: Service Revenue s 14,750 Expenses: Salaries Expense 2,200" Rent Expense 1,200 Supplies Expense F! 600" Fuel Expense i 400" Depreciation Expense—Truck 100 Insurance Expense Fo Heo} Total Expenses Net Income (Loss) $ 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 @ decrease in retained earnings.) Adjusted Trial ynpleted in Re Murphy Delivery Service ‘Statement of Owner's Equity Month Ended Decomber 31, 2016 Murphy, Capital, December 1, 2016 $ ° ‘Owner contribution 22,000 Net income for the month 40,150 $ 32,150 (Owner withdrawal (3.100) Murphy, Capital, December 31, 2016 $29,050 Prepare Murphy Delivery Service's classified balance sheet on December 31, 2016. (Exclude any zero balance accounts from the balance sheet.) he Bal plete‘Murphy Delivery Service Balance Sheet December 31, 2016 Assets Current Assets: Cash $20,350 Accounts Receivable 3,050 Office Supplies 50 Prepaid Insurance eee Total Current Assets $ 23,950 Plant Assets: Truck 18,000 Less: Accumulated Depreciation—Truck ___(400) Total Plant Assets Total Assets $ Liabilities Current Liabilities: Salaries Payable 5 Unearned Revenue Total Liabilities ‘Owner's Equity Murphy, Capital Total Liabilities and Owner's Equity s 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. Review the Adjusted Trial Balance completed in Requirement 5. —date_| cai Dee. 31 Service Revenue | Clos. (1) Income Summary Close expenses for the period. Review the Adjusted Tal Balance completed in Reauirement 5.Date Accounts | Debit Credit Dec. 31 Income Summary arr ea 600] es Clos. 2) Salaries Expense | | 2.200 Rent Expense | 1,200 | Supplies Expense | 600 Fuel Exrense | | 400 | Insurance Expense i 100 | Depreciation Expense—Truck | 100 Close Income Summary. ‘Review the Adjusted Trial Balance completed in Requirement 5. Dato a Accounts ___||_ debit _|_creait Dec. 31 | Income Summary a | 10,150 Clos. (3) || Murphy, Capital | | 10,160 | | Close withdrawals. Revi Balance com __Date i Accounts Debit Credit Dec 31 | Murphy, Capital az | 3,00] Clos. (4) || Murphy, Withdrawals, | | 3,100 | Post the closing entries to the T-accounts, Use "Clos." and the corresponding number as shown in the journal entry as posting references—'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. Revis urnalCash Accounts Payable Service Revenue Bal 20,360] 0 Bal Clos(1) 14,750] 14,750 Bal Bal. 20,350 0 Bal 0 Bal Salaries Payable 4,100 Bal 4,100 Bal Accounts Receivable Uneamed Revenue Salaries Expense Bal 3,050 1,700 Bal. Bal 2200] 2,200 Clos.2) Bal 3,050 1,700 Bal Bal 0 office Supplies Murphy, Capital Depreciation Expense—Truek Bal. 50 Cios.(4) 3,100] 22,000 Bal Bal 100] 100 Clos.) Bal 50 10,150 Clos.3) Bal 0 29,050 Bal. Propaid Insurance Murphy, Withdrawals Insurance Expense Bal 500] Bal 3,100] 3,100 Clos.(4) Bal 400] 100 Clos.(2) Bal 500 Bal ° Bal 0 Truck Income Summary Fuel Expense Bal 8,000 Gios.(2) 4,600] 14,750 Glos.) 400] 400 Clos.2) Bal 2,000 Clos.(@)_10,150| 10,150. Bal Bal 0 0 Bal Accumulated Depreciation—Truck Rent Expense 700 Ba Bal 4.200] 1,200 Clos.(2) 100 Bal Bal ° Expense Bal [__600 Clos.) Bal 0 Requirement 8. Prepare a post-closing trial balance. (Exclude any permanent accounts with a zero balance from the post-closing trial balance.) jew the T-ac in ReauireMurphy Delivery Service Post-Closing Trial Balanco December 31, 2016 Balance ‘Account Title Debit Credit, Cash $20,350 Accounts Receivable 3,050 Office Supplies 50 Prepaid Insurance 500 Truck 8,000 ‘Accumulated Depreciation—Truck $ 100 Salaries Payable 41,100 Unearned Revenue 1,700 Murphy, Capital 29,050 Total 31,950 4: More Info Dec. 1 Murphy Delivery Service began operations by receiving $14,000 cash and a truck with a fair value of $8,000 from Radley Murphy. The business gave Murphy capital in exchange for this contribution. Paid $600 cash for a six-month insurance policy. The policy begins December 1 4 Paid $650 cash for office supplies. 12. Performed delivery services for a customer and received $1,500 cash. 15 Completed a large delivery job, billed the customer, $2,700, and received a promise to collect the $2,700 within one week. 18 Paid employee salary, $1,100. 20 Received $7,000 cash for performing delivery services. 22 Collected $2,200 in advance for delivery service to be performed later. 25 Collected $2,700 cash from customer on account. 27 Purchased fuel for the truck, paying $400 on account. (Credit Accounts Payable) 28 Performed delivery services on account, $1,800. 29 Paid office rent, $1,200, for the month of December. 30 Paid $400 on account. 31 Murphy withdrew cash of $3,100. 2: Requirements