Chapter 4, Problem 1.5CP

COMPREHENSIVE PROBLEMS

Comprehensive Problem 1 for Chapters 1 − 4

Murphy Delivery Service completed the following transactions during December 2018:

Dec. 1	Murphy Delivery Service began operations by receiving $13,000 cash and a truck with a fair value of $9,000 from Russ Murphy. The business issued Murphy capital in exchange for this contribution.
1	Paid $600 cash for a six-month insurance policy. The policy begins December 1.
4	Paid $750 cash foe office supplies.
12	Performed delivery services for a customer and received $2,200 cash.
15	Completed a large delivery job, billed the customer, $3,300, and received a promise to collect the $3,300 within one week.
18	Paid employee salary, $800.
20	Received $7,000 cash for performing delivery services.
22	Collected $2,200 in advance for delivery service to be performed later.
25	Collected $3,300 cash from customer on account.
27	Purchased fuel for the truck, paying $150 on account. (Credit Accounts Payable)
28	Performed delivery services on account, $1,400.
29	Paid office rent, $1,400, for the month of December.
30	Paid $150 on account.
31	Murphy withdrew cash of $2,500.

5. Journalize the adjusting entries using the following adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the T-accounts.

Adjustment data:

1. Accrued Salaries Expense, $800.
2. Depreciation was recorded on the truck using the straight-line method. Assume a useful life of five years and a salvage value of $3,000.
3. Prepaid Insurance for the month has expired.
4. Office Supplies on hand, $4S0.
5. Unearned Revenue earned during the month, $700.
6. Accrued Service Revenue, $450.