Amherst Networking Systems adjusts and closes its books and then prepares financial statements monthly. Amherst uses the perpetual inventory system and all sales on credit have terms of n/30. The company completed the following transactions during August: Aug. 1 Issued check no. 682 for August office rent of $1,300.
2 Issued check no. 683 to pay the salaries payable of $1,300 from July 31.
2 Issued invoice no. 503 for sale on account to R. T. Loeb, $700. Amherst’s cost of this merchandise inventory was $210.
3 Purchased merchandise inventory on credit terms of 1/15, n/60 from Goldner, Inc., $1,400.
4 Received cash on account from Friend Company, $2,400.
4 Sold merchandise inventory for cash, $370 (cost, $111).
5 Issued check no. 684 to purchase office supplies for cash, $730.
7 Issued invoice no. 504 for sale on account to K. D. Sanders, $2,100 (cost, $630).
8 Issued check no. 685 to pay Filter Company $2,500 of the amount owed at July 31. This payment occurred after the end of the discount period.
11 Issued check no. 686 to pay Goldner, Inc. the net amount owed from August 3.
12 Received cash from R. T. Loeb in full settlement of her account receivable from August 2.
16 Issued check no. 687 to pay salaries expense of $1,290.
19 Purchased merchandise inventory for cash, $850, issuing check no. 688.
22 Purchased furniture on credit terms of 3/15, n/60 from Bradford Corporation, $510.
23 Sold merchandise inventory on account to Friend Company, issuing invoice no. 505 for $9,000 (cost, $2,700).
24 Received half the July 31 amount receivable from K. D. Sanders.
26 Purchased office supplies on credit terms of 2/10, n/30 from Filter Company, $240.
30 Returned damaged merchandise inventory to the company from whom Amherst made the cash purchase on August 19, receiving cash of $850.
31 Purchased merchandise inventory on credit terms of 1/10, n/30 from Seacrest Supply, $8,000.
31 Issued check no. 689 to stockholders, for dividends, $600.
1. Open these four-column accounts with their account numbers and July 31 balances in the various ledgers.
Accounts Receivable Subsidiary Ledger: Friend Company $2,400; R. T. Loeb, $0; Parker, Inc., $11,300; and K. D. Sanders, $8,790.
Accounts Payable Subsidiary Ledger: Bradford Corporation, $0; Filter Company, $12,700; Goldner, Inc., $0; and Seacrest Supply, $0.
2. Journalize the August transactions using a sales journal (page 4), a cash receipts journal (page 11, omit Sales Discounts Forfeited column), a purchases journal (page 8), a cash payments journal (page 5), and a general journal (page 9).
3. Post daily to the accounts receivable subsidiary ledger and the accounts payable subsidiary ledger. On August 31, post to the general ledger.
4. Prepare an unadjusted trial balance for the month ended August 31.
5. Journalize and post the following adjusting entries:
a. Office supplies on hand, $1,000.
b. Prepaid insurance expired, $350.
c. Depreciation expense on furniture, $250.
d. Accrued salaries expense, $1,060.
6. Prepare an adjusted trial balance.
7. Prepare a multistep income statement, statement of retained earnings, and classified balance sheet.
8. Journalize closing entries and post.
9. Prepare a post-closing trial balance.