Let’s continue our accounting for Graham’s Yard Care, Inc. from Chapter 3. Starting in July, Graham’s Yard Care, Inc. has begun selling plants that it purchases from a wholesaler. During July, Graham’s Yard Care, Inc. completed the following transactions: 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 (cost $104).

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 (cost $276).

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 (cost $150)

Refer to the T-accounts for Graham’s Yard Care, Inc. from the Continuing Exercise in Chapter 3.

Requirements

1. Journalize and post the July transactions, using the perpetual inventory sys-tem. Omit explanations. Compute each account balance, and denote the balance as Bal. Open additional accounts as necessary.

2. Prepare the July income statement of Graham’s Yard Care, Inc. using the single- step format.