Reference no: EM133058278
Question - On August 1 2021, the beginning of its current fiscal year, the following opening account balances listed in alphabetical order were reported by ABC Corp.:
Accounts payable 2,300 Interest receivable 20
Accounts receivable 4,310 Note receivable, due Oct 31, 2021 4,000
Accumulated depreciation - equipment 2,000 Retained earnings 6,400
Cash 6,020 Salaries payable 1,420
Common Shares 12,000 Supplies 1,030
Equipment 10,000 Unearned revenue 1,260
During August, the following summary transactions were completed:
Aug. 1 - Paid $400 cash for advertising in local newspapers. Advertising flyers will be included with newspapers delivered during August and September. (Use Prepaid Advertising account)
Aug. 3 - Paid August rent of $380. (Use prepaid rent account)
Aug. 6 - Received $3,200 cash from customers in payment of accounts.
Aug. 10 - Paid $3,120 for salaries due employees, of which $1,700 is for August and $1,420 is for July salaries payable.
Aug. 13 - Received $3,800 cash for services performed in August.
Aug. 15 - Purchased additional equipment on account $2,000.
Aug. 17 - Paid vendors $2,000 of accounts payable due.
Aug. 22 - Purchased supplies on account for $800.
Aug. 24 - Paid salaries $2,900.
Aug. 27 - Performed services worth $4,760 on account and billed customers.
Aug. 29 - Received $780 from customers for services to be performed in the future.
Aug. 31 - Declared and paid a $500 dividend.
Required -
1. Create journal entry.
2. Set up T-accounts, enter any opening balances, and post the general journal entries completed from part (1).
3. Prepare a trial balance at August 31.
4. Prepare and post the August adjusting entries. Use the same T-accounts in part (2).
5. Prepare an adjusted trial balance as at August 31.