Preparation of journal entries, T-accounts, adjusted trial balance, income statement, and balance sheet. The adjusted, post-closing trial balance of Rybowiak's Building Supplies on June 30, Year 9, appears in Exhibit 3.17. The firm made the following transactions during July:

(1) Sold merchandise on account for a total selling price of \(\$ 85,000\).

(2) Purchased merchandise inventory on account from various suppliers for \(\$ 46,300\).

(3) Paid rent for the month of July of \(\$ 11,750\).

(4) Paid salaries to employees during July of \(\$ 20,600\).

(5) Collected accounts receivable of \(\$ 34,150\).

(6) Paid accounts payable of \(\$ 38,950\).

(7) Paid miscellaneous expenses of \(\$ 3,200\).

Adjusting entries required at the end of July relate to the following:

(8) The firm paid the premium on a one-year insurance policy on March 1, Year 9, with coverage beginning on that date. This is the only insurance policy in force on June 30, Year 9.

(9) The firm depreciates its equipment over a 10 -year life. Estimated salvage value of the equipment is negligible.

(10) Employees earned salaries of \(\$ 1,600\) during the last two days of July but were not paid. These are the only unpaid salaries at the end of July.

(11) The note payable is a 90-day, 12-percent note issued on June 30, Year 9.

(12) Merchandise inventory on hand on July 31 , Year 9, totals \(\$ 77,950\).

a. Prepare general journal entries to reflect the transactions and other events during July. Indicate whether each entry records a transaction (T) during the month or is an adjusting entry (A) at the end of the month.

b. Set up T-accounts and enter the opening balances in the accounts on June 30, Year 9. Record the entries from part a in the T-accounts, creating additional accounts as required. Cross-reference the entries using the numbers of the transactions above.

c. Prepare an adjusted, preclosing trial balance at July 31, Year 9 .

d. Prepare an income statement for the month of July.

e. Enter the appropriate closing entries at the end of July in the T-accounts, assuming that the firm closes its books each month. Use an Income Summary account.

f. Prepare a balance sheet as of July 31, Year 9 .

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EXHIBIT 3.17 RYBOWIAK'S BUILDING SUPPLIES Adjusted, Post-Closing Trial Balance June 30, Year 9 (Problem 31) Cash.. Accounts Receivable Merchandise Inventory Prepaid Insurance ... Equipment .. Accumulated Depreciation Accounts Payable. Note Payable Salaries Payable Common Stock Retained Earnings $ 44,200 27,250 68,150 400 210,000 $ 84,000 33,100 5,000 1,250 150,000 76,650 $350,000 $350,000