5. Prepare closing entries (you may use the account Expenses for the sum of expenses to save time).

Aug. 1 George issues $55,000 shares of common stock for cash.

Aug. 3 George purchases screen making equipment for $40,000; $7,500 was paid immediately with cash, and the remainder was billed to Henry with payment due in 30 days. Also, Henry purchases on account $10,000 worth of t-shirts he plans to sell.

Aug. 6 George purchases property insurance for $600 cash for the next 6 months.

Aug. 10 George sells some t-shirts on account for a sales price of $1,800 and the cost was $1,000.

Aug. 13 George pays a $55 electric bill on account.

Aug. 14 George receives $7,000 cash from members in advance for screen printing services that he plans to complete in September.

Aug. 16 George distributed $50 cash in dividends to stockholders.

Aug. 19 George paid $1,000 toward the outstanding liability (Notes Payable) from the August 3 transaction.

Aug. 22 George paid $1,600 cash in salaries expense to employees.

Aug. 28 The customer from the August 10 transaction pays $500 cash toward his account balance with George.

Adjusting Entries Date Transaction

Aug. 31 George needs to make an adjustment for the insurance that was used up in August.

Aug. 31 The equipment purchased on August 3 depreciated $1,000 during the month of August.

Aug. 31 From the August 14 transaction, revenue earned in August was $4,500.

The following accounts will be used: Cash, Accounts Receivable, Prepaid Insurance, Equipment, Inventory, Accumulated Depreciation, Notes Payable, Accounts Payable, Common Stock, Unearned Revenue, Dividends, Sales Revenue (t-shirts), Service Revenue (screen printing), Cost of Goods Sold, Electric Expense, Insurance Expense, Salary Expense, and Depreciation Expense. Check Figures: Total Debits and Credits on adjusted Trial Balance = $106,355 and Total Assets = $101.550