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Dwyer Delivery Service completed the following transactions during its first
month of operations, January 2009.
a. Dwyer Delivery Service, a proprietorship, began operations by receiving from the
owner $5,000 cash and a truck valued at $10,000. The business gave Paul Dwyer, the
owner, capital in the business.
b. Paid $200 cash for supplies.
c. Prepaid insurance, $600.
d. Performed delivery services for a customer and received $700 cash.
e. Completed a large delivery job, billed the customer $2,000, and received a promise
to collect the $2,000 within one week.
f. Paid employee salary, $800.
g. Received $900 cash for performing delivery services.
h. Collected $500 in advance for delivery service to be performed later.
i. Collected $2,000 cash from a customer on account.
j. Purchased fuel for the truck, paying $100 with a company credit card.
k. Performed delivery services on account, $800.
l. Paid office rent, $500. This rent is not paid in advance.
m. Paid $100 on account.
n. Dwyer withdrew $1,900 for personal use.

1. Record each transaction in the journal, using the account titles given below.
Key each transaction by its letter. Explanations are not required.
2. Open the following 4-colums-accounts in this sequence:
Service Revenue
Accounts Receivable
Salary Expense
Depreciation Expense
Prepaid Insurance
Insurance Expense
Delivery Truck
Fuel Expense
Accumulated Depreciation
Rent Expense
Accounts Payable
Supplies Expense
Salary Payable
Unearned Service Revenue
Paul Dwyer, Capital
Paul Dwyer, Withdrawals
Income Summary
Then post the transactions that you recorded in requirement 1.
3. Prepare the trial balance of Dwyer Delivery Service at the end of the month.
Enter the trial balance on a 10-column accounting work sheet for the month ended
January 31, 2009, listing all accounts in the sequence given above, including those
accounts with zero balances. Then complete the work sheet using the following
adjustment data at January 31.
o. Accrued salary expense, $800
p. Depreciation expense, $50
q. Prepaid insurance expired, $150
r. Supplies on hand, $100
s. Unearned service revenue earned during January, $400
4. Prepare Dwyer Delivery Service’s income statement and statement of owner’s
equity for the month ended January 31, 2009, 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. On the balance sheet, report assets
at the left and liabilities and owner’s equity at the right.
5. Journalize and post the adjusting entries.

6. Journalize and post the closing entries. Draw double underlines under the
Withdrawals account, the Income Summary account, all the revenue accounts, and all
the expense accounts to indicate their zero balances.
7. Prepare a post-closing trial balance at January 31, 2009.


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