On July 1, 2013, Lula Plume created a new self-storage business,Safe Storage Co. The following transactions occurred during thecompany's first month.

July 1 Plume invested $30,000 cash and buildings worth$150,000
in the company in exchange for common stock.
2 The company rented equipment by paying $2,000 cash for
the first month's (July) rent.
5 The company purchased $2,400 of office supplies for cash.
10 The company paid $7,200 cash for the premium on a
12-month insurance policy. Coverage begins on July 11.
14 The company paid an employee $1,000 cash for two weeks
salary earned.
24 the company collected $9800 cash for storage fees from
customers.
28 The company paid $1000 cash for two weeks salary earned
by an employee.
29 The company paid $950 cash for minor repairs to a leaking
roof.
30 the company paid $400 cash for this month's telephonebill.
31 The company paid $2000 cash for dividends.

The company's chart of accounts follows:

101 Cash
106 Accounts Receivable
124 Office Supplies
128 Prepaid Insurance
173 Buildings
174 Accumulated Depreciation- Buildings
209 Salaries Payable
307 Common Stock
318 Retained Earnings
319 Dividends
401 Storage Fees Earned
606 Depreciation Expense- Buildings
622 Salaries Expense
637 Insurance Expense
640 Rent Expense
650 Office Supplies Expense
684 Repairs Expense
688 Telephone Expense
901 Income Summary

Required:
1. Use the balance column format to set up each ledgeraccount
listed in its chard of accounts.
2. Prepare journal entries to record the transactions for Julyand
post them to the ledger accounts. Record prepaid and unearned
items in balance sheet accounts.
3. Prepare an unadjusted trial balance as of July 31.
4. Use the following information to journalize and postadjusting
entries for the month:
a. Two-thirds of one month's insurance coverage has expired.
b. At the end of the month, $1525 of office supplies arestill
available.
c. This month's depreciation on the buildings is $1500.
d. An employee earned $100 of unpaid and unrecorded salary
as of month-end.
e. The company earned $1150 of storage fees that are not yet
billed at month-end.
5. Prepare the adjusted trial balance as of July 31. Preparethe
income statement and the statement of retained earnings for
the month of July and the balance sheet at July 31, 2013.
6. Prepare journal entries to close the temporary accountsand
post these entries to the ledger.
7. Prepare a post-closing trial balance.

The unadjusted trial balance of PS Music as of July 31, 2016, alongwith the adjustment data for the two months ended July 31, 2016,are shown in Chapter 3. Based upon the adjustment data, thefollowing adjusted trial balance was prepared:
PS Music
ADJUSTED TRIAL BALANCE
July 31, 2016

ACCOUNT TITLE DEBIT CREDIT
1
Cash
9,945.00

2
Accounts Receivable
4,150.00

3
Supplies
275.00

4
Prepaid Insurance
2,475.00

5
Office Equipment
7,500.00

6
Accumulated Depreciation-Office Equipment

50.00
7
Accounts Payable

8,350.00
8
Wages Payable

140.00
9
Unearned Revenue

3,600.00
10
Common Stock

9,000.00
11
Retained Earnings

12
Dividends
1,750.00

13
Income Summary

14
Fees Earned

21,200.00
15
Wages Expense
2,940.00

16
Office Rent Expense
2,550.00

17
Equipment Rent Expense
1,375.00

18
Utilities Expense
1,215.00

19
Music Expense
3,610.00

20
Advertising Expense
1,500.00

21
Supplies Expense
925.00

22
Insurance Expense
225.00

23
Depreciation Expense
50.00

24
Miscellaneous Expense
1,855.00

25
Totals
42,340.00
42,340.00

Required:

1. (Optional) Using the data from Chapter 3, prepare anend-of-period spreadsheet on a sheet of paper or using spreadsheetsoftware.
2. Prepare an income statement, a retained earnings statement, anda balance sheet.*
3.

A. Journalize the closing entries. Refer to the Chart ofAccounts for exact wording of account titles.
B. Post the closing entries. The income summary account is #34 inthe ledger of PS Music. Indicate closed accounts by inserting a 0(zero) in either of the Balance columns opposite the closing entry.No entry is required in the Item column.

4. Prepare a post-closing trial balance.

* For guidance in completing the financial statements, be sureto read the instructions above each statement carefully.

CHART OF ACCOUNTSPS MusicGeneral Ledger

ASSETS
11 Cash
12 Accounts Receivable
14 Supplies
15 Prepaid Insurance
17 Office Equipment
18 Accumulated Depreciation-Office Equipment

LIABILITIES
21 Accounts Payable
22 Wages Payable
23 Unearned Revenue

EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
34 Income Summary

REVENUE
41 Fees Earned

EXPENSES
50 Wages Expense
51 Office Rent Expense
52 Equipment Rent Expense
53 Utilities Expense
54 Music Expense
55 Advertising Expense
56 Supplies Expense
57 Insurance Expense
58 Depreciation Expense
59 Miscellaneous Expense

LabelsCash flows from financing activitiesCash flows frominvesting activitiesCash flows from operating activitiesCurrentassetsCurrent liabilitiesExpensesFor the Two Months Ended July 31,2016July 31, 2016Property, plant, and equipmentAmountDescriptionsAdd dividendsDecrease in retained earningsIncrease inretained earningsNet decrease in cash during June and JulyNetincrease in cash during June and JulyLess dividendsNet incomeNetlossRetained earnings, June 1, 2016Retained earnings, July 31,2016Total assetsTotal current assetsTotal expensesTotalliabilitiesTotal liabilities and stockholdersâ equityTotalproperty, plant, and equipmentTotal stockholdersâ equity

ivorylizard850

Weekly leaderboard

Home

Homework Help 3,900,000

Accounting 580,000