Ocean Atlantic Co. is a merchandising business. The account balances for Ocean Atlantic Co. as of July 1, 2012 (unless otherwise indicated), are as follows:

During July, the last month of the fiscal year, the following transactions were completed:
July 1. Paid rent for July, $4,000.
3. Purchased merchandise on account from Lingard Co., terms 2/10, n/30, FOB shipping point, $25,000.
4. Paid freight on purchase of July 3, $1,000.
6. Sold merchandise on account to Holt Co., terms 2/10, n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $24,000.
7. Received $18,000 cash from Flatt Co. on account, no discount.
10. Sold merchandise for cash, $90,000. The cost of the merchandise sold was $50,000.
13. Paid for merchandise purchased on July 3, less discount.
14. Received merchandise returned on sale of July 6, $7,000. The cost of the merchandise returned was $4,500.
15. Paid advertising expense for last half of July, $9,000.
16. Received cash from sale of July 6, less return of July 14 and discount.
19. Purchased merchandise for cash, $22,000.
19. Paid $23,100 to Carino Co. on account, no discount.
Record the following transactions on Page 21 of the journal.
20. Sold merchandise on account to Reedley Co., terms 1/10, n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $25,000.
21. For the convenience of the customer, paid freight on sale of July 20, $1,100.
21. Received $17,600 cash from Owen Co. on account, no discount.
21. Purchased merchandise on account from Munson Co., terms 1/10, n/30, FOB destination, $32,000.
July 24. Returned $5,000 of damaged merchandise purchased on July 21, receiving credit from the seller.
26. Refunded cash on sales made for cash, $12,000. The cost of the merchandise returned was $7,200.
28. Paid sales salaries of $22,800 and office salaries of $15,200.
29. Purchased store supplies for cash, $2,400.
30. Sold merchandise on account to Dix Co., terms 2/10, n/30, FOB shipping point, $18,750. The cost of the merchandise sold was $11,250.
30. Received cash from sale of July 20, less discount, plus freight paid on July 21.
31. Paid for purchase of July 21, less return of July 24 and discount.

Instructions
1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (() in the Posting Reference column. Journalize the transactions for July starting on Page 20 of the journal.
2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
3. Prepare an unadjusted trial balance.
4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

5. Optional: Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner's equity, and a balance sheet.
9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the owner's capital account.
10. Prepare a post-closing trialbalance.

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110 Cash 112 Accounts Receivable 115 Merchandise Inventory 116 Prepaid Insurance 117 Store Supplies 123 Store Equipment 124 Accumulated Depreciation- Store Equipment 210 Accounts Payable 211 Salaries Payable 310 Kevin Gilmour, Capital, August 1, 2011 311 Kevin Gilmour, Drawing 312 ncome Summary 410 Sales 63,600 153,900 602,400 16,800 11,400 469,500 56,700 96,600 555,300 135,000 3,221,100 92,700 59,400 1,623,000 334,800 81,000 1 Sales Returns and Allowances 412 Sales Discounts 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense 523 Store Supplies Expense 529 Miscellaneous Selling Expense 530 Office Salaries Expense 531 Rent Expense 532 Insurance Expense 539 Miscellaneous Administrative Expense 12,600 182,100 83,700 7,800 a. b. c. d. e. Merchandise inventory on July 31 Insurance expired during the year Store supplies on hand on July 31 Depreciation for the current year Accrued salaries on July 31: $565,000 13,400 3,900 11,500 Sales salaries Office salaries $3,200 1300 4,500