Requirement 1. Record each transaction in the journal. Explanations are not required.

(Record
debits first, then credits. Exclude explanations from journal entries.)
Dec.Dec.
1:
MightyMighty
Delivery Service began operations by receiving
$ 26 comma 000$26,000
cash and a truck with a fair value of
$ 9 comma 000$9,000
from
RipleyRipley
MightyMighty.
The business gave
MightyMighty
capital in exchange for this contribution.

Date
Dec. 1

Accounts
Cash
Truck
Mighty, Capital

Debit

Credit

26,000
9,000
35,000

Dec.Dec.
1: Paid
$ 1 comma 200$1,200
cash for a
twelvetwelve-month
insurance policy. The policy begins
DecemberDecember
1.

Date
Dec. 1

Accounts
Prepaid Insurance
Cash

Debit

Credit

1,200
1,200

Dec.Dec.
4: Paid
$ 750$750
cash for office supplies.

Date
Dec. 4

Accounts
Office Supplies
Cash

Dec.Dec.
12: Performed delivery services for a customer and received
$ 1 comma 600$1,600
cash.

Debit

Credit

750
750

Date
Dec. 12

Accounts
Cash
Service Revenue

Debit

Credit

1,600
1,600

Dec.Dec.
15: Completed a large delivery job, billed the customer,
$ 3 comma 500$3,500,
and received a promise to collect the
$ 3 comma 500$3,500
within one week.

Date
Dec. 15

Accounts
Accounts Receivable
Service Revenue

Debit

Credit

3,500
3,500

Dec.Dec.
18: Paid employee salary,
$ 1 comma 700$1,700.

Date
Dec. 18

Accounts
Salaries Expense
Cash

Debit

Credit

1,700
1,700

Dec.Dec.
20: Received
$ 7 comma 000$7,000
cash for performing delivery services.

Date
Dec. 20

Accounts
Cash
Service Revenue

Debit

Credit

7,000
7,000

Dec.Dec.
22: Collected
$ 1 comma 500$1,500
in advance for delivery service to be performed later.

Date
Dec. 22

Accounts
Cash
Unearned Revenue

Debit

Credit

1,500
1,500

Dec.Dec.
25: Collected
$ 3 comma 500$3,500
cash from customer on account.

Date
Dec. 25

Accounts
Cash
Accounts Receivable

Debit

Credit

3,500
3,500

Dec.Dec.
27: Purchased fuel for the truck, paying
$ 150$150
on account. (Credit Accounts Payable)

Date
Dec. 27

Accounts
Fuel Expense
Accounts Payable

Debit

Credit

150
150

Dec.Dec.
28: Performed delivery services on account,
$ 1 comma 400$1,400.

Date
Dec. 28

Accounts
Accounts Receivable
Service Revenue

Debit

Credit

1,400
1,400

Dec.Dec.
29: Paid office rent,
$ 1 comma 400$1,400,
for the month of
DecemberDecember.

Date
Dec. 29

Accounts
Rent Expense
Cash

Debit

Credit

1,400
1,400

Dec.Dec.
30: Paid
$ 150$150
on account.

Date
Dec. 30

Accounts
Accounts Payable
Cash

Debit

Credit

150
150

Dec.Dec.
3131:
MightyMighty
withdrew cash of
$ 2 comma 200$2,200.

Date
Dec. 31

Accounts

Debit

Mighty, Withdrawals
Cash

Credit

2,200
2,200

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 a "0" on the normal side of the account.
Review the journal entries you prepared above.
LOADING...

Cash
Dec. 1
Dec.
12
Dec.
20
Dec.
22
Dec.
25

Accounts Payable

26,000

1,200 Dec. 1

1,600

750 Dec. 4

7,000
1,500
3,500

Dec.
18
Dec.
1,400
29
Dec.
150
30
1,700

2,200
Bal.

150

150

Dec.
27

1,600 Dec. 12
3,500 Dec. 15

0 Bal.

7,000 Dec. 20
1,400 Dec. 28

Salaries Payable

Dec.
31

32,200

Accounts Receivable
Dec.
Dec.
3,500 3,500
15
25
Dec.
1,400
28
Bal.
1,400
Office Supplies
Dec. 4
750

Dec.
30

Service Revenue

0 Bal.

13,500 Bal.

Unearned Revenue
Dec.
1,500
22

Dec.
18

1,700

1,500 Bal.

Bal.

1,700

Mighty, Capital
35,000 Dec. 1

Salaries Expense

Depreciation ExpenseTruck

Bal.

750

35,000 Bal.

Prepaid Insurance

Mighty, Withdrawals

Dec. 1

1,200

Dec.
31

2,200

Bal.

1,200

Bal.

2,200

Truck

Bal.

0
Insurance Expense

Bal.

Income Summary

0
Fuel Expense

Dec. 1

9,000

Dec.
27

150

Bal.

9,000

Bal.

150

Accumulated Depreciation
Truck

Rent Expense

0 Bal.

Dec.
29

1,400

Bal.

1,400
Supplies Expense

Bal.

Requirement 3. Prepare an unadjusted trial balance as of

DecemberDecember
3131,
20162016.
(Exclude any accounts with a zero balance from the trial balance.)
Review the T-accounts you prepared in Requirement 1.
LOADING...

Mighty Delivery Service

Unadjusted Trial Balance
December 31, 2016
Balance
Account Title
Cash
Accounts Receivable

Debit
$32,200
1,400

Credit

Office Supplies
Prepaid Insurance
Truck
Unearned Revenue
Mighty, Capital
Mighty, Withdrawals
Service Revenue
Salaries Expense
Fuel Expense
Rent Expense

750
1,200
9,000
$1,500
35,000
2,200
13,500
1,700
150
1,400
$50,000

Total

$50,000

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.)
a. Accrued Salaries Expense,
$ 1 comma 700$1,700.

Date
Dec. 31
Adj. (a)

Accounts
Salaries Expense
Salaries Payable

Debit

Credit

1,700
1,700

b. Depreciation was recorded on the truck using the straight-line method. Assume a useful life of
fivefive
years and a salvage value of
$ 3 comma 000$3,000.

Date
Dec. 31
Adj. (b)

Accounts
Depreciation ExpenseTruck
Accumulated DepreciationTruck

Debit

Credit

100
100

c. Prepaid Insurance for the month has expired.

Date
Dec. 31
Adj. (c)

Accounts
Insurance Expense
Prepaid Insurance

Debit

Credit

100
100

d. Office supplies on hand,

$ 450$450.

Date
Dec. 31

Accounts
Supplies Expense

Debit
300

Credit

Adj. (d)

Office Supplies

300

e. Unearned Revenue earned during the month,

$ 1 comma 200$1,200.

Date
Dec. 31
Adj. (e)

Accounts
Unearned Revenue
Service Revenue

Debit

Credit

1,200
1,200

f. Accrued Service Revenue,

$ 850$850.

Date
Dec. 31
Adj. (f)

Accounts

Debit

Accounts Receivable
Service Revenue

Credit

850
850

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
referenceslong dash"Adj.
(a)", "Adj. (b)", etc. Use a "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.
Review the adjusting journal entries you prepared above.
LOADING...

Bal.

Cash
32,200

Bal.

32,200

Accounts Payable
0 Bal.

Service Revenue
13,500 Bal.
1,200 Adj. (e)
850 Adj. (f)
15,550 Bal.

0 Bal.
Salaries Payable
0 Bal.
1,700 Adj. (a)
1,700 Bal.

Accounts Receivable
Bal.
1,400
Adj. (f)
Bal.

Unearned Revenue
Adj. (e) 1,200
1,500 Bal.

850
2,250

300 Bal.

Bal.
Adj.
(a)
Bal.

Salaries Expense
1,700
1,700
3,400

Office Supplies
Bal.

Bal.

Bal.

750

300

Mighty, Capital
Adj.
(d)

450
Prepaid Insurance
Adj.
1,200
100
(c)

Bal.

1,100

Bal.

Truck
9,000

Bal.

9,000

Depreciation ExpenseTruck

35,000 Bal.

Bal.

35,000 Bal.

Adj.
(b)
Bal.

Mighty, Withdrawals
Bal.

Bal.

100
100
Insurance Expense

2,200

Bal.

2,200

Adj.
(c)
Bal.

Income Summary
Bal.
Bal.

Accumulated Depreciation
Truck
0 Bal.
Adj.
100
(b)
100 Bal.

0
100
100
Fuel Expense
150
150
Rent Expense

Bal.

1,400

Bal.

1,400

Bal.
Adj.
(d)
Bal.
Requirement 5. Prepare an adjusted trial balance as of
DecemberDecember
3131,
20162016.
(Exclude any zero balance accounts from the adjusted trial balance.)
Review the T-accounts you prepared in Requirement 4.
LOADING...

Mighty Delivery Service

Adjusted Trial Balance
December 31, 2016

Supplies Expense
0
300
300

Balance
Account Title
Cash
Accounts Receivable
Office Supplies
Prepaid Insurance
Truck
Accumulated DepreciationTruck
Salaries Payable
Unearned Revenue
Mighty, Capital
Mighty, Withdrawals
Service Revenue
Salaries Expense
Depreciation ExpenseTruck
Insurance Expense
Fuel Expense
Rent Expense
Supplies Expense

Debit
$32,200
2,250
450
1,100
9,000

Credit

$100
1,700
300
35,000
2,200
15,550
3,400
100
100
150
1,400
300
$52,650

Total

$52,650

Requirement 6. Prepare
MightyMighty
Delivery Service's income statement and statement of owner's equity for the month ended
DecemberDecember
3131,
20162016,
and the classified balance sheet on that date. On the income statement, list expenses in decreasing order
by
amountlong dashthat
is, the largest expense first, the smallest expense last.
Begin by preparing the income statement. List expenses in decreasing order by
amountlong dashthat
is, the largest expense first, the smallest expense last.
Review the Adjusted Trial Balance completed in Requirement 5.
LOADING...

Mighty Delivery Service

Income Statement
Month Ended December 31, 2016
Revenues:
Service Revenue
Expenses:
Salaries Expense

$15,550
$3,400

Rent Expense
Supplies Expense
Fuel Expense
Depreciation ExpenseTruck
Insurance Expense

1,400
300
150
100
100
5,450

Total Expenses

$10,100

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 a decrease in retained earnings.)
Review the Adjusted Trial Balance completed in Requirement 5.
LOADING...

Mighty Delivery Service

Statement of Owner's Equity
Month Ended December 31, 2016
Mighty, Capital, December 1, 2016
Net income for the month
Owner contribution

$0
10,100
35,000

Owner withdrawal

$45,100
(2,200)

Mighty, Capital, December 31, 2016

$42,900

Prepare
MightyMighty
Delivery Service's classified balance sheet on
DecemberDecember
3131,
20162016.
(Exclude any zero balance accounts from the balance sheet.)
Review the Adjusted Trial Balance completed in Requirement 5.
LOADING...

Mighty Delivery Service

Balance Sheet
December 31, 2016
Assets
Current Assets:
Cash
Accounts Receivable
Office Supplies
Prepaid Insurance
Total Current Assets
Plant Assets:

$32,200
2,250
450
1,100
$36,000

Truck
Less: Accumulated DepreciationTruck

9,000
(100)
8,900

Total Plant Assets

$44,900

Total Assets
Liabilities
Current Liabilities:
Salaries Payable
Unearned Revenue

$1,700
300
2,000

Total Liabilities
Owner's Equity

42,900

Mighty, Capital

$44,900

Total Liabilities and Owner's Equity

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.
LOADING...

Date
Dec. 31
Clos. (1)

Accounts
Service Revenue
Income Summary

Debit

Credit

15,550
15,550

Close expenses for the period.

Review the Adjusted Trial Balance completed in Requirement 5.
LOADING...

Date
Dec. 31
Clos. (2)

Accounts
Income Summary
Depreciation ExpenseTruck
Rent Expense
Salaries Expense
Supplies Expense
Fuel Expense
Insurance Expense

Debit

Credit

5,450
100
1,400
3,400
300
150
100

Close Income Summary.

Review the Adjusted Trial Balance completed in Requirement 5.
LOADING...

Date
Dec. 31

Accounts
Income Summary

Debit
10,100

Credit

Clos. (3)

Mighty, Capital

10,100

Close withdrawals.
Review the Adjusted Trial Balance completed in Requirement 5.
LOADING...

Date
Dec. 31
Clos. (4)

Accounts

Debit

Mighty, Capital
Mighty, Withdrawals

Credit

2,200
2,200

Post the closing entries to the T-accounts. Use "Clos." and the corresponding number as shown in the
journal entry as posting referenceslong dash"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 postclosing 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.
Review the closing journal entries you prepared above.
LOADING...

Bal.
Bal.

Cash
32,200
32,200

Accounts Payable
0 Bal.
0 Bal.

Service Revenue
Clos.(1) 15,550 15,550 Bal.
0 Bal.

Salaries Payable
1,700 Bal.
1,700 Bal.
Accounts Receivable
Bal.
2,250
Bal.
2,250
Office Supplies
Bal.
450
Bal.
450

Prepaid Insurance
Bal.
1,100

Unearned Revenue
300 Bal.
300 Bal.
Mighty, Capital
2,200 35,000 Bal.
10,100 Clos.(3)
42,900 Bal.

Depreciation ExpenseTruck
Bal.
100
100 Clos.(2)
Bal.
0

Mighty, Withdrawals
2,200 2,200 Clos.(4)

Insurance Expense
100
100 Clos.(2)

Clos.(4)

Bal.

Bal.
Bal.

Salaries Expense
3,400 3,400 Clos.(2)
0

Bal.

Bal.

1,100

Bal.

Bal.
Bal.

Truck
9,000
9,000

Income Summary
Clos.(2)
5,450 15,550 Clos.(1)
Clos.(3) 10,100 10,100 Bal.
0 Bal.

Accumulated
DepreciationTruck
100 Bal.
100 Bal.

Bal.

0
Fuel Expense
150
150 Clos.(2)
0

Bal.
Bal.

Rent Expense
Bal.
Bal.

1,400
0

1,400 Clos.(2)

Supplies Expense
300
300 Clos.(2)
0

Bal.
Bal.

Requirement 8. Prepare a post-closing trial balance. (Exclude any permanent accounts with a zero
balance from the post-closing trial balance.)
Review the T-accounts you prepared in Requirement 7.
LOADING...

Mighty Delivery Service

Post-Closing Trial Balance
December 31, 2016
Balance
Account Title
Cash
Salaries Payable
Accounts Receivable
Office Supplies
Prepaid Insurance
Truck
Unearned Revenue
Accumulated DepreciationTruck
Mighty, Capital
Total

Debit
$32,200

Credit
1,700

2,250
450
1,100
9,000
300
100
42,900
$45,000

$45,000