This exercise continues the Graham’s Yard Care, Inc. exercise begun in Chapter 1. Consider the July transactions for Graham’s Yard Care that were presented in Chapter 5.
Jul 2 Completed lawn service and received cash of $500.
5 Purchased 100 plants on account for inventory, $250, plus freight in of $10.
15 Sold 40 plants on account, $400.
17 Consulted with a client on landscaping design for a fee of $150 on account.
20 Purchased 100 plants on account for inventory, $300.
21 Paid on account, $100.
25 Sold 100 plants for cash, $700.
31 Recorded the following adjusting entries:
Accrued salaries for the month of July equal $225
Depreciation on equipment $30
Physical count of plant inventory, 50 plants
Refer to the T-accounts for Graham’s Yard Care, Inc. from the continuing exercise in Chapter 3.
1. Prepare perpetual inventory records for July for Graham’s Yard Care, Inc. using the FIFO method.
2. Journalize and post the July transactions using the perpetual inventory record created in Requirement 1. Omit explanations. Key all items by date. Compute each account balance, and denote the balance as Bal.
3. Journalize and post the adjusting entries. Denote each adjustment amount as Adj.
4. Journalize and post closing entries. After posting all closing entries, prove the equality of debits and credits in the ledger.