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1. Enter beginning balances in the T-accounts from the Beginning Balance Sheet, all accounts have normal balances. Common Stock has 200,000 shares issued and outstanding.

2. Additional information: Company uses a perpetual inventory system (discounts and freight are recorded in the inventory account). Suppliers offer a 2% discount; company does not offer discounts to customers. No adjustment for inventory is needed.

3. Record the following summarized August transactions using the general journal provided. Use a blank line between transactions. Use the account titles as shown in the T-accounts, do not add any accounts.

a. Purchased inventory on account, $35,000

b. Paid $3,200 freight fees

c. Sold inventory on account, $25,000, cogs $12,500

d. Paid Wages and Salaries, $10,000, includes the amount due from previous month

e. Received payments from customers on account, $35,000

f. Cash sales, $110,000, cogs $55,000

g. Paid for 6 months of business insurance, $6,000

h. Paid for 1 years rent, $12,000

i. Received cash advance payments from customers $6,000

j. Paid outstanding accounts payable within the discount period, $38,300

k. Completed $2,000 of work for customers that paid in advance (use Sales Account)

4. Post the transactions to the T-accounts; use reference numbers when posting, calculate the balance in each account after all posting is complete. See T-account page for additional instructions.

5. Prepare a trial balance. Note: All trial balances are located in the same tab

6. Journalize and post any necessary adjusting entries; continue using the journal to record the entries. Hint: There are 3 entries. After adjusting entries have been posted all accounts will be used and have normal balances.

7. Additional adjusting entry: Wages earned but not paid totaled $1,000

8. Prepare an adjusted trial balance

9. Prepare a multiple-step Income Statement, a Retained Earnings Statement, and a Classified Balance Sheet

10. Journalize and post your closing entries

11. Prepare a post-closing Trial Balance

14. Check Figures:

Trial balance before adjustment: $391,750 dr/cr

Net Income: $57,200 Beginning Balance sheet July 31,20XX Cash $142,000 Accounts Payable $13,300 Accounts Receivable 13,250 Wage payable 1,200 Inventory 40,000 Common Stock 200,000 Fixed Assets (6,000 per year depreciation) 60,000 Retained earnings 34,750 Accum. Depr. (cr. Bal) (6,000) Total assets 249,250 Total liabilities & equity 249,250

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