The chart of accounts of Avery?s Delivery Service is as follows:

Avery?s Delivery Service completed the following transactions during the month of October:

1. Audrey Avery invested $33,000 in the delivery service from her personal savings account.

2. Bought used delivery trucks on account, $13,000.

3. Bought office equipment for cash, $1,100.

4. Paid advertising expense, $250.

5. Collected cash for delivery services rendered, $3,500.

6. Paid drivers? salaries, $750.

7. Paid gas expense for trucks, $1,000.

8. Performed delivery services for a customer on account, $800.

9. Telephone expense due but unpaid, $50.

10. Received $100 as partial payment of transaction H.

11. Audrey withdrew cash for personal use, $700.

As Audrey?s newly hired accountant, you must perform the following:

1. Set up T accounts using the chart of accounts. Record transactions in the T accounts. (Place the letter of the transaction next to the entry.)

2. Foot the T accounts where appropriate and determine the ending balances.

3. Prepare a trial balance at the end of October.

4. Prepare from the trial balance, in proper form, (a) an income statement for the month of October, (b) a statement of owner?s equity, and (c) a balance sheet as of October 31, 201X.

Transcribed Image Text:

Chart of Accounts Assets Revenue Cash 111 Delivery Fees Earned 411 Accounts Receivable 112 Expenses Office Equipment 121 Advertising Expense 511 Delivery Trucks 122 Gas Expense 512 Liabilities Salaries Expense 513 Accounts Payable 211 Telephone Expense 514 Owner's Equity Audrey Avery, Capital 311 Audrey Avery, Withdrawals 312