On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following transactions occurred
Question:
On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following transactions occurred during the company’s first month.
Required
1. Use the balance column format to set up each ledger account listed in its chart of accounts.
2. Prepare journal entries to record the transactions for July and post them to ledger accounts.
3. Prepare an unadjusted trial balance as of July 31.
4. Use the following information to journalize and post adjusting entries for the month.
a. Prepaid insurance of $400 expired this month.
b. At the end of the month, $1,525 of office supplies are still available.
c. This month’s depreciation on buildings is $1,500.
d. An employee earned $100 of unpaid and unrecorded salary as of month-end.
e. The company earned $1,150 of storage revenue that is not yet recorded at month-end.
5. Prepare the adjusted trial balance as of July 31. Prepare the income statement and the statement of retained earnings for the month of July and the balance sheet at July 31.
6. Prepare journal entries to close the temporary accounts and post these entries to the ledger.
7. Prepare a post-closing trial balance.
Step by Step Answer: