Tom Keenan is a vacation planner who specializes in outback adventures; he has a high presence at outdoor shows and gets most of his business from there. On May 1, 2020, Tom started his business called Epic Adventures. The following activities occurred during July, the third month of operations:

Required

1. Prepare journal entries to record the July transactions.

2. Set up the following general ledger accounts using T-accounts, entering the balances brought forward from June 30, 2020: Cash (101) $17,500; Supplies (126) $1,700; Equipment (161) $9,500; Accounts Payable (201) $3,000; Unearned Travel Deposit Revenue (233) $11,300; Tom Keenan, Capital (301) $4,500; Tom Keenan, Withdrawals (302) $14,500; Travel Planning Revenue (401) $60,500; Wages Expense (623) $28,600; and Rent Expense (640) $7,500.

3. Post the entries to the T-accounts; calculate the ending balance in each account.

4. Prepare a trial balance at July 31, 2020.

5. Use the trial balance to prepare an income statement and statement of changes in equity for the three months ended July 31, 2020, as well as a balance sheet at July 31, 2020.

Transcribed Image Text:

Purchased camping supplies on credit for $400. Collected $7,000 in advance for a trip in August. Collected the final payment of $13,500 for this month's trip. 4 July Paid $4,500 to rent a van for this month's trip. Paid $700 for supplies purchased on account last month. 15 Tom withdrew cash of $650 to do some personal shopping on the weekend. 20 Paid his assistant wages of $1,400. Purchased new camera equipment on credit for $1,000. 31