(LO 2, 3, 4), AP On August 1, 2025, the following were the account balances of B\&B Repair Services.

During August, the following summary transactions were completed.

Aug. 1 Paid \(\$ 400\) cash for advertising in local newspapers. Advertising flyers will be included with newspapers delivered during August and September.

3 Paid August rent \(\$ 380\).

5 Received \(\$ 1,200\) cash from customers in payment of account.

10 Paid \(\$ 3,120\) for salaries due employees, of which \(\$ 1,700\) is for August and \(\$ 1,420\) is for July salaries payable.

12 Received \(\$ 2,800\) cash for services performed in August.

15 Purchased store equipment on account \(\$ 2,000\).

20 Paid creditors $2,000 of accounts payable due.
22 Purchased supplies on account $800.
25 Paid $2,900 cash for employees' salaries.
27 Billed customers $3,760 for services performed.
29 Received $780 from customers for services to be performed in the future.
Adjustment data:
1. A count shows supplies on hand of $960.
2. Accrued but unpaid employees' salaries are $1,540.
3. Depreciation on equipment for the month is $320.
4. Services were performed to satisfy $800 of unearned service revenue.
5. One month's worth of advertising services has been received.
6. One month of interest revenue related to the $4,000 note receivable has accrued. The 4-month note has a 6% annual interest rate.

Instructions

a. Enter the August 1 balances in the ledger accounts. (Use T-accounts.)

b. Journalize the August transactions.

c. Post to the ledger accounts. B&B's chart of accounts includes Prepaid Advertising, Interest Receivable, Service Revenue, Interest Revenue, Advertising Expense, Depreciation Expense, Supplies Expense, Salaries and Wages Expense, and Rent Expense.

d. Prepare a trial balance at August 31.

e. Journalize and post adjusting entries.

f. Prepare an adjusted trial balance.

g. Prepare an income statement and a retained earnings statement for August and a classified balance sheet at August 31.

h. Journalize and post closing entries and complete the closing process.

i. Prepare a post-closing trial balance at August 31.

Transcribed Image Text:

Cash Accounts Receivable Notes Receivable Supplies Equipment Debit $ 6,040 2,910 4,000 1,030 10,000 $23,980 Accumulated Depreciation Equipment Accounts Payable Unearned Service Revenue Salaries and Wages Payable Common Stock Retained Earnings Credit $ 600 2,300 1,260 1,420 12,000 6,400 $23,980