Reference no: EM132420875

Problem: The December 31, 2019, trial balance of Bob's Delivery Service, before adjusting entries, included the following selected accounts. Note: This is a partial trial balance. Many accounts are not shown.  All accounts have a normal balance.

Accounts receivable                                     176,000

Notes receivable                                          200,000

Unearned delivery revenue                           24,000

Prepaid rent                                                 36,000

Prepaid insurance                                        18,000

Equipment                                                  240,000

Accumulated depreciation: equipment         61,250

Salaries expense                                         120,000

Delivery revenue                                         473,300

Additional data:

a) The equipment has an estimated life of 10 years, no residual value, and the double declining balance method is used for calculating depreciation.

b) The prepaid rent was payment for a six-month lease beginning on November 1, 2019.

c) The prepaid insurance represents the annual premium on a policy providing coverage starting September 1, 2019.

d) On September 11, 2019, we accepted a $400,000 note from a customer in payment for delivery services. It is a six month note and the interest rate is 5%. You need to count exact days to determine the interest.

e) The supplies inventory on Maybe1, 2019, was $8,350. Supplies costing $16,650 were acquired during the year. A count on Dec. 31, 2019, indicated supplies on hand of $4,810.