The trial balance of the Handy Harriet's Hardware Store on September 30, 1979, is as follows:

Transactions during October and additional information are as follows:
(1) Sales, all on account, total \(\$ 150,000\).
(2) Merchandise inventory purchased on account from various suppliers is \(\$ 88,400\).
(3) Rent for the month of October of \(\$ 22,000\) is paid.
(4) Salaries paid to employees during October are \(\$ 38,700\).
(5) Accounts receivable of \(\$ 63,800\) are collected.
(6) Accounts payable of \(\$ 73,200\) are paid.
(7) Miscellaneous expenses of \(\$ 8,200\) are paid in cash.
(8) The premium on a 1-year insurance policy was paid on June 1, 1979.

(9) Equipment is depreciated over a 10 -year life. Estimated salvage value of the equipment is considered to be negligible.
(10) Employee salaries earned during the last two days of October but not paid are \(\$ 4,300\).
(11) Based on past experience. the firm estimates that 1 percent of all sales on account will become uncollectible.
(12) Specific customers' accounts of \(\$ 3,800\) are determined to be uncollectible.
(13) The note payable is a 90 -day, 12-percent note issued on September 30, 1979.
(14) Merchandise inventory on hand on October 31, 1979, totals \(\$ 151,500\).
a Prepare general journal entries to reflect the transactions and other events during October. Indicate whether each entry records a transaction during the month (T) or is an adjusting entry at the end of the month (A).
b Set up T-accounts and enter the opening balances in the accounts on September 30, 1979. Record the entries from part a in the T-accounts, creating additional accounts as required.
c Prepare an adjusted, preclosing trial balance as of October 31, 1979.
d Prepare an income statement for the month of October.
e Enter the appropriate closing entries at the end of October in the T-accounts, assuming that the books are closed each month. Use an Income Summary account.
f Prepare a balance sheet as of October 31, 1979.

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Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Equipment Allowance for Uncollectible Accounts Accumulated Depreciation Accounts Payable... Note Payable Salaries Payable Capital Stock Retained Earnings Total 86,500 54,500 136,300 800 420,000 $ 6,500 166,000 66,300 10,000 2,500 300,000 146,800 $698,100 $698,100