At June 30, 2015, the end of its most recent fiscal year, Red River Computer Consultants Ltd.'s post-closing trial balance was as follows:

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Red River conducted the following transactions during July 2015, and adjusts its accounts monthly.
July 2 Issued $50,000 of common shares for cash.
3 Purchased liability insurance coverage for a year, $3,600.
3 Paid the first two (July and August 2015) months' rent for an annual lease of office space for $4,000 per month.
6 Purchased $3,800 of supplies for cash.
7 Purchased equipment, paying $4,000 cash and signing a two-year bank loan for $20,000. The equipment has a four-year useful life. The bank loan has a 6% interest rate which is payable on the first day of each following month.
9 Visited client offices and agreed on the terms of a consulting project. Red River will invoice the client, Connor Productions, on the 20th of each month for work performed.
10 Collected $1,200 on account from Milani Brothers Ltd. This client was invoiced in June when the service was provided to them.
13 Completed services for Fitzgerald Enterprises. This client paid $1,120 in advance last month. All services relating to this payment are now completed.
14 Paid a utility bill of $400. This related to June utilities that were accrued at the end of June.
16 Met with a new client, Thunder Bay Technologies. Received $12,000 cash in advance for future work to be performed.
18 Paid semi-monthly salaries for $11,000.
20 Invoiced Connor Productions for $28,000 of consulting fees provided on account.
20 Received an invoice for legal advice, $2,200. The amount is not due until August 15.
23 Completed the first phase of the project for Thunder Bay Technologies. Recognized $10,000 of revenue from the cash advance previously received (see July 16 transaction).
27 Received $15,000 cash from Connor Productions in partial payment of the invoice issued on July 20. 31 Prepared adjusting entries for the following:
• Expiry of insurance coverage (see July 3 transaction)
• Adjustment of prepaid rent (see July 3 transaction)
• Supplies used, $1,250 (see July 6 transaction)
• Equipment depreciation (see July 7 transaction)
• Accrual of interest on bank loan (see July 7 transaction)
• Salaries for the second half of July, $11,000, to be paid on August 1
• Estimated utilities expense for July, $800 (invoice to be received in August)
• Income tax for July, $1,200, to be paid in August
Instructions
(a) Record the above transactions and adjusting journal entries.
(b) Prepare T accounts and post the general and adjusting journal entries.
(c) Prepare an adjusted trial balance as at July 31.
(d) Prepare (1) an income statement, (2) a statement of changes in equity, and (3) a statement of financial position.
(e) Prepare and post closing journal entries to the T accounts set up in part (b).
(f) Red River needs to maintain a current ratio of 2.5:1 in order to maintain its financial standing with its bankers. Calculate the current ratio. Has it achieved the 2.5-to-1 benchmark?

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Dehit $5,230 1,200 690 Credit Cash Accounts receivable Supplies Accounts payable Unearned revenue Common shares $ 400 1,120 3,600 2,000 $7,120 $7,120