Presented below are the purchases and cash payments journals for Garison Co. for its first month of operations.

                         

In addition, the following transactions have not been journalized for July. The cost of all merchandise sold was 65% of the sales price.

July 1 The founder, R. Garison, invests $80,000 in cash in exchange for common stock.
6 Sell merchandise on account to Hardy Co. $5,400 terms 1/10, n/30.
7 Make cash sales totaling $4,000.
8 Sell merchandise on account to D. Marlowe $3,600, terms 1/10, n/30.
10 Sell merchandise on account to L. Clinton $4,900, terms 1/10, n/30.
13 Receive payment in full from D. Marlowe.
16 Receive payment in full from L. Clinton.
20 Receive payment in full from Hardy Co.
21 Sell merchandise on account to S. Kane $4,000, terms 1/10, n/30.
29 Returned damaged goods to J. Eaton and received cash refund of $450.

Instructions
  (a) Open the following accounts in the general ledger.

101 Cash                                        332 Dividends
112 Accounts Receivable               401 Sales
120 Merchandise Inventory           414 Sales Discounts
127 Store Supplies                         505 Cost of Goods Sold
131 Prepaid Rent                           631 Supplies Expense
201 Accounts Payable                   729 Rent Expense
311 Common Stock

  (b) Journalize the transactions that have not been journalized in the sales journal, the cash receipts journal (see Illustration G-8), and the general journal.
  (c) Post to the accounts receivable and accounts payable subsidiary ledgers. Follow the sequence of transactions as shown in the problem.
  (d) Post the individual entries and totals to the general ledger.
  (e) Prepare a trial balance at July 31, 2012.
  (f) Determine whether the subsidiary ledgers agree with the control accounts in the general ledger.
  (g) The following adjustments at the end of July are necessary

(1) A count of supplies indicates that $140 is still on hand.
(2) Recognize rent expense for July, $500.
Prepare the necessary entries in the general journal. Post the entries to the general ledger.

  (h) Prepare an adjusted trial balance at July 31, 2012.