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 for 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.
Requirements
Record each transaction in the journal using the following chart of accounts. Explanations are REQUIRED.
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Truck
Accumulated Depreciation-Truck
Accounts Payable
Salaries Payable
Unearned Revenue
Murphy, Capital
Murphy, Withdrawals
Income Summary
Service Revenue
Salaries Expense
Depreciation Expense-Truck
Insurance Expense
Fuel Expense
Rent Expense
Supplies Expense
Post the transactions in the T-accounts.
Prepare an unadjusted trial balance as of December 31, 2025.
Prepare a worksheet as of December 31, 2025 (optional).
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:
a. Accrued Salaries Expense, $800.
b. 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.
c. Prepaid Insurance for the month has expired.
d. Supplies on hand, $450.
e. Unearned Revenue earned during the month, $700.
f. Accrued Service Revenue, $450.
Prepare an adjusted trial balance as of December 31, 2025.
Prepare Murphy Delivery Service's income statement and statement of owner's equity for the month ended
December 31, 2025, 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.
Journalize the closing entries and post to the T-accounts.
Prepare a post-closing trial balance as of December 31, 2025.
