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Q#6 Doris Dowdy opened Dowdy Dining Delivery ("DDD") in October of 20X1 and during that month completed these transactions: a. Doris Dowdy, invested $10,000 cash and a vehicle valued at $15,000 in the business in exchange for common stock. DDD plans to depreciate the vehicle using the units of production method with an estimated salvage value of 10% and an estimated useful life of 60,000 miles. b. DDD paid $720 for a 12-month insurance policy effective October 1, 20X1. c. DDD performed $4,000 of delivery services for the month of October 20X1 ($2,800 was paid in cash and $1,200 was performed on account for corporate accounts). d. During October 20X1, DDD paid $2,000 cash for supplies. e. During October 20X1, DDD paid $1,000 for auto fuel used on October deliveries. f. During October 20X1, DDD hired a part-time driver. The driver worked 18 hours in October, earning $270 of pay, all of which will be paid on the next scheduled pay date which occurs in November 20X1. g. During October 20X1, DDD collected $800 from corporate clients for deliveries made earlier in the month "on account" (item c.) Assume DDD drove the vehicle 2,200 miles in October and counted $600 of supplies on October 31st 20X1. Consider the above information and make any necessary October adjustments, what was the company's accrual basis net income for the 1-month ended October 31st 20X1? A. $835 B. $2,730 C. $1,575 D. $775 E. $1,635

Q#6 Doris Dowdy opened Dowdy Dining Delivery ("DDD") in October of 20X1 and during that month completed these transactions: a. Doris Dowdy, invested $10,000 cash and a vehicle valued at $15,000 in the business in exchange for common stock. DDD plans to depreciate the vehicle using the units of production method with an estimated salvage value of 10% and an estimated useful life of 60,000 miles. b. DDD paid $720 for a 12-month insurance policy effective October 1, 20X1. c. DDD performed $4,000 of delivery services for the month of October 20X1 ($2,800 was paid in cash and $1,200 was performed on account for corporate accounts). d. During October 20X1, DDD paid $2,000 cash for supplies. e. During October 20X1, DDD paid $1,000 for auto fuel used on October deliveries. f. During October 20X1, DDD hired a part-time driver. The driver worked 18 hours in October, earning $270 of pay, all of which will be paid on the next scheduled pay date which occurs in November 20X1. g. During October 20X1, DDD collected $800 from corporate clients for deliveries made earlier in the month "on account" (item c.) Assume DDD drove the vehicle 2,200 miles in October and counted $600 of supplies on October 31st 20X1. Consider the above information and make any necessary October adjustments, what was the company's accrual basis net income for the 1-month ended October 31st 20X1? A. $835 B. $2,730 C. $1,575 D. $775 E. $1,635

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q#6 Doris Dowdy opened Dowdy Dining Delivery ("DDD") in October of 20X1 and during that month completed these transactions: a. Doris Dowdy, invested $10,000 cash and a vehicle valued at $15,000 in the business in exchange for common stock. DDD plans to depreciate the vehicle using the units of production method with an estimated salvage value of 10% and an estimated useful life of 60,000 miles. b. DDD paid $720 for a 12-month insurance policy effective October 1, 20X1. c. DDD performed $4,000 of delivery services for the month of October 20X1 ($2,800 was paid in cash and $1,200 was performed on account for corporate accounts). d. During October 20X1, DDD paid $2,000 cash for supplies. e. During October 20X1, DDD paid $1,000 for auto fuel used on October deliveries. f. During October 20X1, DDD hired a part-time driver. The driver worked 18 hours in October, earning $270 of pay, all of which will be paid on the next scheduled pay date which occurs in November 20X1. g. During October 20X1, DDD collected $800 from corporate clients for deliveries made earlier in the month "on account" (item c.) Assume DDD drove the vehicle 2,200 miles in October and counted $600 of supplies on October 31st 20X1. Consider the above information and make any necessary October adjustments, what was the company's accrual basis net income for the 1-month ended October 31st 20X1? A. $835 B. $2,730 C. $1,575 D. $775 E. $1,635
Transcribed Image Text:Q#6 Doris Dowdy opened Dowdy Dining Delivery ("DDD") in October of 20X1 and during that month completed these transactions: a. Doris Dowdy, invested $10,000 cash and a vehicle valued at $15,000 in the business in exchange for common stock. DDD plans to depreciate the vehicle using the units of production method with an estimated salvage value of 10% and an estimated useful life of 60,000 miles. b. DDD paid $720 for a 12-month insurance policy effective October 1, 20X1. c. DDD performed $4,000 of delivery services for the month of October 20X1 ($2,800 was paid in cash and $1,200 was performed on account for corporate accounts). d. During October 20X1, DDD paid $2,000 cash for supplies. e. During October 20X1, DDD paid $1,000 for auto fuel used on October deliveries. f. During October 20X1, DDD hired a part-time driver. The driver worked 18 hours in October, earning $270 of pay, all of which will be paid on the next scheduled pay date which occurs in November 20X1. g. During October 20X1, DDD collected $800 from corporate clients for deliveries made earlier in the month "on account" (item c.) Assume DDD drove the vehicle 2,200 miles in October and counted $600 of supplies on October 31st 20X1. Consider the above information and make any necessary October adjustments, what was the company's accrual basis net income for the 1-month ended October 31st 20X1? A. $835 B. $2,730 C. $1,575 D. $775 E. $1,635
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