At June 30, 2018, the end of its most recent fiscal year, River 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. River conducted the following transactions during July 2018.
July 3 Issued $10,000 of common shares for cash.
4 Purchased insurance coverage for a year, $3,600.
5 Paid the first two (July and August 2018) months' rent for an annual lease of office space for $4,000 per month. (Hint: Use the Prepaid Rent account.)
6 Purchased $3,800 of supplies for cash.
6 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.
10 Visited client offices and agreed on the terms of a consulting project. River will invoice the client, Connor Productions Ltd., on the 19th of each month for work performed.
12 Collected $1,200 on account from Milani Brothers Ltd. This client was invoiced in June when the service was provided.
13 Completed services for Mactaquac Inc. This client paid $1,120 in advance last month. All services relating to this payment are now completed. (Hint: Use the Fees Earned account.)
16 Paid salaries for the first half of the month, $11,000.
17 Paid a utility bill of $400. This related to June utilities that were accrued at the end of June.
18 Met with a new client, Bay Technologies. Received $12,000 cash in advance for future work to be performed.
19 Invoiced Connor Productions for $28,000 of consulting fees provided on account. (Hint: Use the Fees Earned account.)
20 Received an invoice for legal advice, $2,200. The amount is not due until August 20. (Hint: Use the Professional Fees Expense account.)
23 Completed the first phase of the project for Bay Technologies Ltd. Recognized $10,000 of revenue from the cash advance previously received (see July 18 transaction).
25 Paid $500 income tax payable owing at the end of June, in addition to $1,200 for the July income tax instalment.
27 Received $15,000 cash from Connor Productions in partial payment of the invoice issued on July 19.
30 Declared and paid a $5,000 dividend.
River Consultants records adjustments monthly. Adjustment data for the month of July are as follows:
1. Expiry of insurance coverage (see July 4 transaction)
2. Adjustment of prepaid rent (see July 5 transaction)
3. Supplies used, $1,250 (see July 6 transaction)
4. Equipment depreciation, using the straight-line method of depreciation (see July 6 transaction)
5. Accrual of interest on bank loan (see July 6 transaction)
6. Salaries for the second half of July, $11,000, to be paid on August 1
7. Estimated utilities expense for July, $800 (invoice to be received in August)
Instructions
(a) Record the above transactions.
(b) Set up T accounts, enter any opening balances, and post the general journal entries prepared in part (a).
(c) Prepare a trial balance at July 31.
(d) Record and post the July adjusting journal entries.
(e) Prepare an adjusted trial balance at July 31.
(f) Prepare
(1) An income statement,
(2) A statement of changes in equity, and
(3) A statement of financial position.
(g) Prepare and post the closing journal entries, assuming River closes its books monthly.
(h) River needs to maintain a current ratio of 2:1 in order to maintain its financial standing with its bankers. Calculate the current ratio. Has it achieved the 2-to-1 benchmark?

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Debit Credit Cash Accounts receivable Supplies Accounts payable Income tax payable Unearned revenue Common shares Retained earnings $15,230 1,200 690 400 500 1,120 3,600 $17,120$17,120