The chart of accounts for Garret Alder’s Delivery Service is as follows.

Adler’s Delivery Service completed the following transactions during the month of July:
A. Garret Adler invested $30,000 in the delivery service from his personal savings account.
B. Bought delivery trucks on account, $14,000.
C. Bought office equipment for cash, $1,500.
D. Paid advertising expense, $500.
E. Collected cash for delivery services rendered, $2,400.
F. Paid drivers’ salaries, $900.
G. Paid gas expense for trucks, $1,100.
H. Performed delivery services for a customer on account, $900.
I. Telephone expense due but unpaid, $100.
J. Received $600 as partial payment of Transaction H.
K. Garret withdrew cash for personal use, $250.
As Garret’s newly hired accountant, you must perform the following:
1. Set up T accounts using the chart of accounts. Record transactions in the T accounts. (Place the letter of the transaction next to the entry.)
2. Foot the T accounts where appropriate and determine the ending balances.
3. Prepare a trial balance at the end of July.
4. Prepare from the trial balance, in proper form,

(a) An income statement for the month of July 

(b) A statement of owner’s equity 

(c) A balance sheet as of July 31, 2023

Transcribed Image Text:

Assets Cash 111 Accounts Receivable 112 Office Equipment 121 Delivery Trucks 122 Liabilities Accounts Payable 211 Owner's Equity G. Adler, Capital 311 G. Adler, Withdrawals 312 Chart of Accounts Revenue Delivery Fees Earned 411 Expenses Advertising Expense 511 Gas Expense 512 Salaries Expense 513 Telephone Expense 514