Chapter 4, Problem 1.7CP

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.

7. Prepare Murphy Delivery Service’s income statement and statement of owner’s equity for the month ended December 31, 2018, 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.