Question

Matthews Delivery Service, Inc., completed the following transactions during its first month of operations for January 2012:

a. Matthews Delivery Service, Inc., began operations by receiving $6,000 cash and a truck valued at $11,000. The business issued common stock to aquire these assets.
b. Paid $300 cash for supplies.
c. Prepaid insurance, $700.
d. Performed delivery services for a customer and received $800 cash.
e. Completed a large delivery job, billed the customer $1,500, and received apromise to collect the $1,500 within one week.
f. Paid employee salary, $700.
g. Received $12,000 cash for performing delivery services.
h. Collected $600 in advance for delivery service to be performed later.
i. Collected $1,500 cash from a customer on account.
j. Purchased fuel for the truck, paying $200 with a company credit card. (CreditAccounts payable)
k. Performed delivery services on account, $900.l.Paid office rent, $600. This rent is not paid in advance.
m. Paid $200 on account.
n. Paid cash dividends of $2,100.

Required:

a. Record each transaction in the journal.
b. Post the transactions that you recorded in Requirement 1 in the T-accounts.
c. Write the trial balance for the month ended January 31, 2012.

Answer 1

a. Matthews Delivery Service, Inc., began operations by receiving $6,000 cash and a truck valued at $11,000. The business issued common stock to acquire these assets.

Dr Cash 6,000

Dr Vehicles 11,000

Cr Common stock 17,000

b. Paid $300 cash for supplies.

Dr Supplies 300

Cr Cash 300

c. Prepaid insurance, $700.

Dr Prepaid insurance 700

Cr Cash 700

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

Dr Cash 800

Cr Service revenue 800

e. Completed a large delivery job, billed the customer $1,500, and received a promise to collect the $1,500 within one week.

Dr Accounts receivable 1,500

Cr Service revenue 1,500

f. Paid employee salary, $700.

Dr Wages expense 700

Cr Cash 700

g. Received $12,000 cash for performing delivery services.

Dr Cash 12,000

Cr Service revenue 12,000

h. Collected $600 in advance for delivery service to be performed later.

Dr Cash 600

Cr Unearned revenue 600

i. Collected $1,500 cash from a customer on account.

Dr Cash 1,500

Cr Accounts receivable 1,500

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

Dr Fuel expense 200

Cr Accounts payable 200

k. Performed delivery services on account, $900.

Dr Accounts receivable 900

Cr Service revenue 900

l.Paid office rent, $600. This rent is not paid in advance.

Dr Rent expense 600

Cr Cash 600

m. Paid $200 on account.

Dr Accounts payable 200

Cr Cash 200

n. Paid cash dividends of $2,100.

Dr Dividends 2,100

Cr Cash 2,100

Cash

Debit Credit

6,000

300

700

800

700

12,000

600

1,500

600

200

2,100

16,300

Vehicles

Debit Credit

11,000

Common stock

Debit Credit

17,000

Supplies

Debit Credit

300

Prepaid insurance

Debit Credit

700

Service revenue

Debit Credit

800

1,500

12,000

900

15,200

Accounts receivable

Debit Credit

1,500

1,500

900

900

Wages expense

Debit Credit

700

Unearned revenue

Debit Credit

600

Accounts payable

Debit Credit

200

200

0 0

Fuel expense

Debit Credit

200

Rent expense

Debit Credit

600

Dividends

Debit Credit

2,100

Trial balance

debit credit

Cash 16,300

Vehicles 11,000

Accounts receivable 900

Supplies 300

Prepaid insurance 700

Unearned revenue 600

Common stock 17,000

Service revenue 15,200

Wages expense 700

Fuel expense 200

Rent expense 600

Dividends 2,100

Totals $32,800 $32,800