Lundholm Company's comparative balance sheets, income statement, and statement of cash flows for July are presented below:

REQUIRED:

a. Set up T-accounts and enter beginning and ending balances for each account in Lundholm Company's balance sheet.

b. Provide a set of summary journal entries for July that would produce the financial statements presented above. For simplicity, you may assume that all of Lundholm Company's sales are made on account and that all of its purchases are made on account. One such entry is provided as an example.

c. Post the journal entries from part b to T-accounts and verify ending balances.

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LUNDHOLM COMPANY Comparative Balance Sheets July 1 July 31 Cash..... 24 600 $ 1,184 Accounts receivable Inventory.... Prepaid rent, Current assets. Fixtures and equipment at cost. Accumulated depreciation 6,500 6,800 2,400 1,800 400 9,500 10,184 1,900 2,620 (800) (880) Plant and equipment, net 1, 100 1,740 Total assets .. $10,600 $11.924 Accounts payable.... Salaries and wages payable. Taxes payable Bank loan payable. $ 3,000 $ 3,100 70 100 374 1,600 .... Current liabilities. 4,700 3,544 Long-term loan Common stock Retained earnings 4,600 1,300 2,000 4,600 1,780 Total liabilities and shareholders' equity.. $10,600 $11,924