Lee Chang opened Lee’s Window Washing on July 1, 2021. In July, the following transactions were completed:

July 1 Invested $20,000 cash in the business.

1 Purchased a used truck for $25,000, paying $5,000 cash and signing a note payable for the balance.

1 Paid $2,800 on a one-year insurance policy, effective July 1.

5 Billed customers $3,300 for cleaning services.

12 Purchased supplies for $2,100 on account.

18 Paid $3,000 for employee salaries.

25 Billed customers $8,900 for cleaning services.

28 Collected $3,300 from customers billed on July 5.

31 Paid $550 for repairs on the truck.

31 Withdrew $2,600 cash for personal use.

Instructions

a. Journalize and post the July transactions to the general ledger.

b. Prepare a trial balance at July 31.

c. Journalize and post the following July 31 adjustments:

1. Services of $1,500 were provided but remained unbilled and uncollected at July 31.

2. The truck has an estimated useful life of fi ve years.

3. One twelfth of the insurance expired.

4. An inventory count shows $700 of supplies on hand at July 31.

5. Accrued but unpaid employee salaries were $800.

6. The note payable has a 5.5% annual interest rate.

d. Prepare an adjusted trial balance.

e. Prepare the income statement and statement of owner’s equity for July, and a classified balance sheet at July 31, 2021. Of the note payable, $5,000 must be paid by June 30, 2022.

f. Journalize and post the closing entries.

g. Prepare a post-closing trial balance at July 31.

Do companies need to make adjusting and closing entries at the end of every month?