Cougar Mountain Sports employs three employees, and pays time-and-a-half for overtime. Monthly paychecks are distributed on the Friday following the last day of the month. The company withholds federal income tax (18%), state income tax (7%), FICAOASDI (6.2%)for wages up to $118,500, and FICAMedicare (1.45%). The company also pays payroll taxes for FICAOASDI (6.2%) for wages up to $118,500, FICAMedicare (1.45%), and state and federal unemployment (5.4% and 0.6% respectively) for wages up to $7,000. August 2024 has 22 working days. The payroll data for the three employees for the month ended August 31 follows:

Name John Doe Mark Hall Alex Smith Straight Time Rate $34 18 21 Hours Worked 184 186 190 Beginning Cumulative Earnings $46,000 $3,200 $28,300 Transactions for August 2024 1 Paid $785 cash for office supplies. 2 Purchased merchandise on account for $835 4 Collected $5,700 cash from customers on account. 7 Received a $600 invoice for radio advertising on account. 8 Established a petty cash fund for $250. 11 Received $7,350 cash for performing coaching services. 15 Paid previous month's salaries 17 Collected $2,000 in advance for coaching services to be performed later. 20 Completed a large coaching job and billed the customer for $6,575. 22 Received the electric bill and cell phone bill for the business totaling $725. (Credit Accounts Payable) 25 Collected $2,500 cash from customers on account. 27 Sold merchandise to customers for $3,800 on account. The merchandise cost $1,680. 30 Paid $3,350 on account. 31 Cash dividends of $2,700 were paid to stockholders. Adjusting Entries a Depreciation method on the truck was changed to the units of production method in August. Depreciation was recorded assuming a useful life of five years, salvage value of $3,000 and estimated miles of 100,000. The truck was used 2,400 miles in August. b Prepaid Insurance for the month has expired. C Office Supplies on hand, $545 d Unearned Revenue earned during the month, $1,100. e Another month of rent has expired f The company records bad debt using the percent of receivables method estimating that 2% of receivables will not be collected. Bad debt is calculated after all regular entries are recorded. Accrued payroll expense for August g h Accrued payroll tax expense for August Cougar Mountain Sports Adjusted Trial Balance July 31, 2024 Account Title Cash Accounts Receivable Merchandise Inventory Estimated Returns Inventory Office Supplies Prepaid Insurance Prepaid Rent Land Building Accumulated Equipment Accumulated Truck Accumulated Depreciation-Truck Accounts Payable Salaries Payable Interest Payable Refunds Payable Unearned Revenue Notes Payable Common Stock Retained Earnings Dividends Service Revenue Sales Revenue Sales Discounts Forfeited Cost of Goods Sold Salaries Expense Rent Expense Utilities Expense Depreciation Expense - Building Depreciation Expense - Equipment Depreciation Expense - Truck Advertising Expense Delivery Expense Supplies Expense Insurance Expense Interest Expense Income Tax Expense Depreciation-Building Depreciation-Equipment Debit Balance 168,178 13,490 2,498 556 450 700 3,333 45,000 6,500 10,000 Credit 2,700 2,200 133 15,870 3,500 2,610 1,300 1,700 43,500 110,000 67,192 $ 250,705 $ 250,705 Assets Current Assets Total Current Assets Property, Plant and Equipment Total Property, Plant & Equipment Total Assets Balance Sheet Total Liabilities Liabilities Stockholder's Equity Total Stockholder's Equity Total Liabilities and Stockholder's Equity Statement of Retained Earnings Income Statement Revenues: Total Revenue Operating Expenses: Selling and Administrative Expenses: Total Selling and Administrative Expenses Total Operating Expenses Operating Income Other Income and (Expenses) Total Other Income and (Expenses) Income Before Income Tax Expense TO