The following account balances are available for Ten four

Trucking Company #8953

The following account balances are available for Ten-four Trucking Company on January 31,
2017:Cash ........................................................ $ 27,340Accounts Receivable
........................................ 41,500Prepaid Insurance ...........................................
18,000Warehouse ..................................................... 40,000Accumulated Depreciation-
Warehouse ................. 21,600Truck Fleet ...................................................
240,000Accumulated Depreciation-Truck Fleet ................ 112,500Land
........................................................... 20,000Accounts Payable .............................................
32,880Notes Payable .................................................. 50,000Interest Payable
................................................. 4,500Customer Deposits ...............................................
6,000Capital Stock ................................................... 100,000Retained Earnings
............................................... 40,470Freight Revenue .................................................
165,670Gas and Oil Expense ............................................. 57,330Maintenance Expense
............................................. 26,400Wage and Salary Expense .......................................
43,050Dividends ......................................................... 20,000Required1. Identify and analyze
the necessary adjustments at January 31, 2017, for each of the following:a. Prepaid insurance
represents the cost of a 24-month policy purchased on January 1,2017.b. The warehouse has
an estimated useful life of 20 years and an estimated salvage value of $4,000.c. The truck fleet
has an estimated useful life of six years and an estimated salvage value of $15,000.d. The
promissory note was signed on January 1, 2016. Interest at an annual rate of 9% and the
principal of $50,000 are due on December 31, 2017.e. The customer deposits represent
amounts paid in advance by new customers. A total of $4,500 of the balance in Customer
Deposits was recognized during January 2017.f. Wages and salaries earned by employees at
the end of January but not yet paid amount to $8,200.g. Income taxes are accrued at a rate of
30% at the end of each month.2. Prepare in good form the following financial statements:a.
Income statement for the month ended January 31, 2017b. Statement of retained earnings for
the month ended January 31, 2017c. Balance sheet at January 31, 20173. Compute Tenfour's
current ratio. What does this ratio tell you about the company's liquidity?4. Compute Tenfour's
profit margin. What does this ratio tell you about the company's profitability?View Solution:
The following account balances are available for Ten four Trucking Company

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