5 6 Taj Ramaj, a sole proprietor, created July Lemonade on December 1, 2020. July Lemonade is a wholesaler that specializes in selling organic flavored lemonades to colleges and universities, restaurants and grocery stores. This merchandising company uses the perpetual inventory system, the gross method and adjusts its books monthly. The transactions for the month of December are as follow: 12/1 Taj Ramaj invested $100,000 cash, a $20,000 computer system and $5,000 of office equipment Into the company 12/1 The company paid $1,500 cash for rent for the retail store space for the month of December. 12/1 The company purchased $48,000 of inventory from Organic Juices Unlimited. The credit terms are 2/10, n/30. 12/2 The company purchased office supplies for $3,450 cash. 12/2 The company purchased a delivery vehicle for $17,000 cash. 12/2 The company purchased a 12-month insurance policy for $5,200 cash. 12/3 The company purchased $18,000 of Inventory from Juice Power. The credit terms are 2/15, 1/30. 12/5 The company sold merchandise to Delaware Technical Community College on credit for $42,850, terms 2/15, net 30. The merchandise sold had a cost of $21,250. 12/7 The company purchased Inventory from Culce for $27,850 cash. 12/8 The company returned $4,500 of inventory to Juice Power and received full credit, 12/10 The company sold merchandise to Good Life Eats for $65.200 cash. The merchandise sold had a cost of $38,400 12/10 Pold the amount due on the 12/1 purchase from Organic Juices Unlimited 12/12 Good Life Eats discovered they received the wrong flavor, but they decided to keep the merchandise anyway. The company issued a credit memorandum and returned $7,000 cash to Good Ufe Eats for the error. 12/15 Delaware Technical Community College pald for the merchandise sold on 12/5. 12/18 The company paid the amount due, less the return on the 12/3 purchase from Juice Power. 12/20 The owner withdrew $7,500 cash for personal use. Required: 1. 2. 3. 4. Using the chart of accounts provided for you, prepare Journal entries for the transactions for the month of December, Post the December transactions using the T-accounts provided for you. Create an unadjusted trial balance. Check Figure: 233,050 Total Debite Once you have verified that your unadjusted trial balance is correct, prepare the following adjusting entries. a. A physical count of the Office Supplies account showed that there was $2,000 worth of office supplies on hand. The balance of the Office Supplies account on the unadjusted trial balance is $3,450 b. One months insurance expired on the 12-month insurance polley purchased on December 1" for $4,800 c. Depreciation expense on the computer equipment, office equipment, and the vehicle totaled $750 for the month of December d. July Lemonade pays thelt 3 part-time employees on a monthly basis. The employees will receive their paychecks totaling $3,000 on January 2 2021 Post the adjusting entries to the T-accounts provided. Create an adjusted trial balance. Check Figure: 236,800 Total Delvine Once you have verified that your adjusted trial balance is correct, prepare a multiple-step Income statement see page 181 in your text book for guidance), a statement of owner's equity see page 131), and a balance sheet (see page 131). Check Figure: Nut income 33,448 Prepare closing entries Post the closing entries to the accounts provided. 5 6. 7. . 9. 10 Prepare a post-closing trial balance Chart of Accounts Liabilities 200 205 Accounts Payable Salaries Payable Assets 100 105 110 120 125 130 135 140 145 Cash Accounts Receivable Merchandise Inventory Office Supplies Prepaid Insurance Computer Equipment Office Equipment Vehicles Accumulated Depreciation Capital 300 305 T. Ramal, Capital T. Ramaj, Withdrawals Revenues 400 405 410 Sales Sales Discounts Sales Returns and Allowances Expenses 500 SOS 510 515 520 525 Cost of Goods Sold Rent Expense Office Supplies Expense Insurance Expense Depreciation Expense Salaries Expense 600 Income Summary A B D E F G H K - M Cash Accounts Receivable Merchandise Inventory 1 2. 3 4 5 6 7 8 9 70 11 12. 13 14 15 -16 17 18 19 20 21 22 23 24 25 26 27 28 Office Supplies Prepaid Insurance Computer Equipment A B D E G H L M N 6 7 28 19 30 31 32 Office Equipment Vehicles Accumulated Depreciation Accounts Payable Salaries Payable T. Ramai. Capital 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 A B C D E F G H K L M N Office Supplies Expense Insurance Expense Depreciation Expense 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 Salaries Expense Income Summary IN