Date Transaction

Aug. 1 Cliff issues $50,000 shares of common stock for cash.

Aug. 3 Cliff purchases barbering equipment for $32,500; $12,500 was paid immediately with cash, and the remaining $20,000 was billed to Cliff with payment due in 30 days. He decided to buy used equipment, because he was not sure if he truly wanted to run a barber shop. He assumed that he will replace the used equipment with new equipment within a couple of years.

Aug. 6 Cliff purchases supplies for $829 cash.

Aug. 10 Cliff provides $2,400 in services to a customer who asks to be billed for the services.

Aug. 13 Cliff pays a $58 utility bill with cash.

Aug. 14 Cliff receives $3,600 cash in advance from a customer for services not yet rendered.

Aug. 16 Cliff distributed $250 cash in dividends to stockholders.

Aug. 17 Cliff receives $3,000 cash from a customer for services rendered.

Aug. 19 Cliff paid $10,000 toward the outstanding liability from the August 3 transaction.

Aug. 22 Cliff paid $5,319 cash in salaries expense to employees.

Aug. 28 The customer from the August 10 transaction pays $1,200 cash toward Cliffs account.

ADJUSTMENTS

Date Transaction

Aug. 31 Cliff took an inventory of supplies and discovered that $136 of supplies remain unused at the end of the month.

Aug. 31 The equipment purchased on August 3 depreciated $1,355 during the month of August.

Aug. 31 Clipem Cliff performed $2,400 of services during August for the customer from the August 14 transaction.

Aug. 31 Reviewing the company bank statement, Clipem Cliff discovers $142 of interest earned during the month of August that was previously uncollected and unrecorded. As a new customer for the bank, the interest was paid by a bank that offered an above-market-average interest rate.

Aug. 31 Unpaid and previously unrecorded income taxes for the month are $5,481. The tax payment was to cover his federal quarterly estimated income taxes. He lives in a state that does not have an individual income tax.

GENERAL JOURNAL PAGE 1 GENERAL JOURNAL PAGE 2 POST REF POST. REF DEBIT CREDIT DATE DEBIT CREDIT DESCRIPTION Adjusting Entries 1 1 1 2 2019 2 100 301 3 Aug. 515 3 31 Supplies Expense Supplies 4 2 3 4 5 6 7 105 4 5 107 100 201 5 6 6 31 Depreciation Expense: Equipment Accumulated Depreciation: Equipment 520 108 7 8 8 7 8 9 9 9 105 100 31 Unearned Revenue Service Revenue 202 401 10 9 10 11 12 11 10 11 12 13 101 401 31 Interest Receivable Interest Revenue 103 403 13 510 100 12 13 14 15 16 17 18 31 Income Tax Expense Income Tax Payable DATE DESCRIPTION 1 2019 2 Aug. 1 Cash 3 Common Stock 4|| 51 3 Equipment 61 Cash 7 Accounts Payable 8 9 9 6 Supplies 10 Cash 11 12 10 Accounts Receivable 13 Service Revenue 14 15 13 Utility Expense 16 Cash 17 18 14 Cash 191 Unearned Revenue 201 21 16 Dividends 22 Cash 23 24 17 Cash 25 Service Revenue 261 271 19 Accounts Payable 28 Cash 29 30 22 Salaries Expense 311 Cash 32 33 28 Cash 34 Accounts Receivable 525 204 14 15 16 17 18 19 20 21 100 202 Closing Entries 31 Service Revenue Interest Revenue Income Summary 19 20 21 401 403 400 303 100 22 22 100 401 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 31 Income Summary Supplies Expense Depreciation Expense: Equipment Income Tax Expense Salaries Expense Utility Expense 400 515 520 525 505 510 23 24 25 26 27 201 100 28 23 24 25 26 27 28 29 30 31 32 33 34|| 29 505 100 31 Retained Earnings Income Summary 302 400 30 31 32 33 100 101 31 Retained Earnings Dividends 302 303 34