In Chapter $2$In a Set of Financial Statements, What Information Is Conveyed about Receivables?$,$ you prepared Webworks statements for July. They are included here as a starting point for August.

Here are Webworks financial statements as of July $31.$

Webworks

Balance Sheet

July $31$

Assets

Liabilities

$$5,720$

$1,050$

Current

Cash

Accounts Receivable

Less Allowance for

Doubtful AWebworks

Income Statement

As of July $31$

Revenue

Expenses

Earning before Tax

Tax Expense

Net Income

$$2,300$

$(1,295)$

$1,005$

$(300)$Webworks

Stmt$.$ Of Retained Earnings

As of July $31$

Retained Earnings, July $1$

Net Income

Retained Earnings, July $31$

$$470$

$705$

$$1$

The following events occur during August:

a$.$ Webworks decides to begin selling a limited selection of inventory items related to its business. During August, Webworks purchases specialty keyboards for $$4,900$ on account and flash drives for $$3,200$ on account with the hopes of selling them to its Web site customers or others who might be interested. Due to the limited amount of inventory, Webworks will use a periodic system. Record these purchases.

b$.$ Webworks purchases supplies worth $$100$ on account.

c$.$ Webworks starts and completes six more Web sites and bills clients for $$2,700.$

d$.$ Recall that in July, Webworks received $$500$ in advance to design two Web sites. Webworks completes these sites during August.

e$.$ Webworks collects $$2,400$ in accounts receivable.

f$.$ Webworks pays Nancy $$600$ for her work during the first three weeks of August.

g$.$ In June, Webworks designed a site for Pauline Smith and billed her. Unfortunately, before she could finish paying the bill, Ms$.$ Smith$$s business folded. It is unlikely Webworks will collect anything. Record the entry to write off the $$100$ remaining receivable from Ms$.$ Smith.

h$.$ Webworks sells keyboards for $$4,500$ and flash drives for $$3,000$ cash.

i$.$ Webworks pays off its salaries payable from July.

j$.$ Webworks pays off $$6,000$ of its accounts payable.

k$.$ Webworks receives $$100$ in advance to work on a Web site for a local dentist. Work will not begin on the Web site until September.

l$.$ Webworks pays Leon salary of $$2,000.$

m$.$ Webworks pays taxes of $$475$ in cash.

Required:

A$.$ Prepare journal entries for the above events.

B$.$ Post the journal entries to T$-$accounts.

C$.$ Prepare an unadjusted trial balance for Webworks for August.

D$.$ Prepare adjusting entries for the following and post them to your T$-$accounts.

n$.$ Webworks owes Nancy $$250$ for her work during the last week of August.

o$.$ Leon$$s parents let him know that Webworks owes $$250$ toward the electricity bill. Webworks will pay them in September.

p$.$ Webworks determines that it has $$60$ worth of supplies remaining at the end of August.

q$.$ Prepaid rent should be adjusted for August$$s portion.

r$.$ Webworks is continuing to accrue bad debts at $10$ percent of accounts receivable.

s$.$ Webworks performs a count of ending inventory and determines that $$1,900$ in keyboards and $$1,100$ in flash drives remain. Record cost of goods sold.

E$.$ Prepare an adjusted trial balance.

F$.$ Prepare financial statements for August.

Prepare me Journal Entries, T accounts, Trial Balance and Webworks for the month of August according to the given Information. And Make sure that we have $5720$ cash in Trial Balance.