Ace Networking Systems adjusts and closes its books and then prepares financial statements monthly. Ace uses the perpetual inventory system. The company completed the following transactions during August:

Aug. 1 Issued check no. 682 for August office rent of $1,200.

2 Issued check no. 683 to pay the salaries payable of $1,150 from July 31.

2 Issued invoice no. 503 for sale on account to R. Larson, $300. Ace's cost of this merchandise inventory was $90.

3 Purchased merchandise inventory on credit terms of 1/15, n/60 from Gardner, Inc., $1,600.

4 Received net amount of cash on account from Fuller Company, $1,940, within the discount period.

4 Sold merchandise inventory for cash, $350 (cost, $105).

5 Received from Pride, Inc. merchandise inventory that had been sold earlier for $450 (cost, $135).

5 Issued check no. 684 to purchase office supplies for cash, $760.

7 Issued invoice no. 504 for sale on account to K. Sam, $2,300 (cost, $690).

8 Issued check no. 685 to pay Federal Company $2,700 of the amount owed at July 31. This payment

occurred after the end of the discount period.

11 Issued check no. 686 to pay Gardner, Inc. the net amount owed from August 3.

12 Received cash from R. Larson in full settlement of her account receivable from August 2.

16 Issued check no. 687 to pay salaries expense of $1,140.

19 Purchased merchandise inventory for cash, $850, issuing check no. 688.

22 Purchased furniture on credit terms of 3/15, n/60 from Bradford Corporation, $570.

23 Sold merchandise inventory on account to Fuller Company, issuing invoice no. 505 for $9,700 (cost,

$2,910)

24 Received half the July 31 amount receivable from K. Samafter the end of the discount period.

26 Purchased office supplies on credit terms of 2/10, n/30 from Federal Company, $210

30 Returned damaged merchandise inventory to company from whom Ace made the cash purchase on August 19, receiving cash of $850.

31 Purchased merchandise inventory on credit terms of 1/10, n/30 from Summer Supply, $8,500.

31 Issued check no. 689 to Lester Maverick, owner of the business, for personal withdrawal, $900.

General Ledger:

Nbr. Account Name Debit Credit

101 Cash $5,050

102 Accounts Receivable 21,880

105 Merchandise Inventory 41,100

109 Office Supplies 1,350

117 Prepaid Insurance 2,300

160 Furniture 37,000

161 Accumulated DepreciationFurniture $10,800

201 Accounts Payable 12,300

204 Salaries Payable 1,150

220 Note Payable, Long-term 27,000

301 Lester Maverick, Capital 57,430

302 Lester Maverick, Withdrawals

400 Income Summary

401 Sales Revenue

402 Sales Discounts

403 Sales Returns and Allowances

501 Cost of Goods Sold

510 Salaries Expense

513 Rent Expense

514 Depreciation ExpenseFurniture

516 Insurance Expense

519 Supplies Expense

Accounts Receivable Subsidiary Ledger: Fuller Company $2,000; R. Larson, $0; Pride, Inc., $11,100; K. Sam, $8,780.

Accounts Payable Subsidiary Ledger: Bradford Corporation, $0; Federal Company, $12,300; Gardner, Inc., $0; Summer Supply, $0

Requirements:

1.The general ledger accounts and subsidiary ledgers, along with their beginning balances, have been opened for you. Journalize the August transactions using a sales journal (page 4), a cash receipts journal (page 11), a purchases journal (page 8), a cash payments journal (page 5), and a general journal (page 9). Ace makes all credit sales on terms of 3/10, 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:

a. Office supplies on hand, $900.

b. Prepaid insurance expired, $750.

c. Depreciation expense, $230.

d. Accrued salaries expense, $1,040.

5.Prepare an adjusted trial balance.

6.Prepare a multi-step income statement, statement of owner's equity, and classified balance sheet.

7.Journalize closing entries and post.

8.Prepare a post-closing trial balance.