A-1 Networking System adjusts and closes its books and then prepares financial statements monthly. A-I uses the perpetual inventory system. The company completed the following transactions during August:

Aug. 1 Issued check no. 682 for August office rent of $1,000. 2 Issued check no. 683 to pay the salaries payable of $1,250 from July 31. 2 Issued invoice no. 503 for sale on account to R. T. Loeb, $600. A-1s cost of this merchandise inventory was $190. 3 Purchased merchandise inventory on credit terms of 1/15, n/60 from Grant, Inc., $1,400. 4 Received net amount of cash on account from Fullam Company, $2,156, within the discount period. 4 Sold merchandise inventory for cash, $330, (cost, $104). 5 Received from Park-Hee, Inc. merchandise inventory that had been sold earlier for $550 (cost, $174). 5 Issued check no. 684 to purchase office supplies for cash, $780. 7 Issued invoice no. 504 for sale on account to K. D. Skipper, $2,400 (cost, $759). 8 Issued check no. 685 to pay Federal Company $2,600 of the amount owed at July 31. This payment occurred after the end of the discount period. 11 Issued check no. 686 to pay Grant, Inc. the net amount owe from August 3. 12 Received cash from R. T. Loeb in full settlement of her account receivable from August 2. 16 Issued check no. 687 to pay salaries expense of $1,240. 19 Purchased merchandise inventory for cash, $850, issuing check no. 688. 22 Purchased furniture on credit terms of 3/15, n/60 from Beaver Corporation, $510. 23 Sold merchandise inventory on account to Fullam Company, using invoice no. 505 for $9,966 (cost, $3,152). 24Received half the July 31 amount receivable from K. D. Skipper after the end of the discount period. 26Purchased office supplies on credit terms of 2/10, n/30 from Federal Company, $180. 30Returned damaged merchandise inventory to company from whom A-1 made the cash purchase on August 19, receiving cash of $850. 31Purchased merchandise inventory on credit terms of 1/10, n/30 from Suncrest Supply, $8,330. 31Issued check no. 689 to Lester Mednick, owner of the business, for personal withdrawal, $1,700.

Requirements: 1. Open these four-column accounts with their account numbers and July 31 balances in the various ledgers.

General Ledger

101Cash$4,490 102Accounts Receivable22,560 105Merchandise Inventory41,800 109Office Supplies 1,340 117Prepaid insurance 2,200 160Furniture37,270 161 Accumulated Depreciation-Furniture$10,550 201Accounts Payable 12,600 204Salaries Payable 1,250 220Note Payable, Long-term 31,000 301Lester Mednick, Capital 54,260 302Lester Mednick, Withdrawals 400Income Summary 401Sales Revenue 402Sales Discounts 403Sales Returns and Allowances 501Cost of Goods Sold 510Salaries Expense 513Rent Expense 514Depreciation Expense-Furniture 516Insurance Expense 519Supplies Expense

Accounts Receivable Subsidiary Ledger: Fullam Company $2,200; R. T. Loeb, $0; Park-Hee, Inc. $11,590; K. D. Skipper, $8,770.

Accounts Payable Subsidiary Ledger: Beaver Corporation, $0; Federal Company, $12,600; Grant, Inc., $0; Suncrest Supply, $0.

1. Journalize the August transactions in a series of special journals: a sales journal, a cash receipts journal, a purchases journal, a cash payments journal and a general journal. A-1 makes all credit sales on terms of 2/10, n/30.
2. Post daily to the accounts receivable subsidiary ledger and the accounts payable subsidiary ledger. On August 31, post to the general ledger.
3. Prepare an unadjusted trial balance for the month ended August 31.
4. Journalize and post the following adjusting entries at August 31: a. Office supplies on hand, $990. b. Prepaid insurance expired, $550. c. Depreciation expense, $230. d. Accrued salaries expense, $1,030.
5. Prepare an adjusted trial balance for August.
6. Prepare a multistep income statement, statement of owners equity and classified balance sheet for August.
7. Journalize August closing entries and post to the General Ledger.
8. Prepare a post-closing trial balance for August.
9. Prepare the following ratios: a. Current ratio b. Acid test ratio c. Debt ratio d. Accounts receivable turnover e. Days sales in receivable f. Return on assets
10. Submit a package with the following documents for August and include a cover sheet: 1. All Journals2. General Ledger3. Unadjusted Trial Balance 4. Adjusted Trial Balance 5. Post-closing Trial Balance6. Income Statement7. Owners Equity Statement8. Balance Sheet 10. Sheet with ratios.