JUSTHERONS (a) Using the T-Accounts provided below enter the opening balances for each account. Note-not all T Accounts needed may be created and blank T- Accounts are provided if accounts need to be created (b) Journalize the transactions for the month. Post the transactions and update the balances in the I-accounts. (c) Prepare an unadjusted trial balance at year end. (d) Record the adjustments required at the year end. Post the adjusting entries in the T Accounts created and update the account balances as required (e) Prepare an adjusted trial balance at year end. balance sheet. (f) Prepare a multiple-step income statement, statement of owner's equity, and classified Answer the following Questions 1. When should adjusting entries be recorded? Why does the accounting cycle include 'trial balances Calculate the gross profit margin and the current ratio for your business? T Accounts for Answers A-B D CashThe Orange Engine Tires, owned by O. Black, sells tires. The shop has an October 31/2020fiscal year end uses a perpetual inventory system. On October 1, the company's trial balance reported the following Cash $21.385 O. Black, capital $58,400 Merchandise inventory 64.125 O. Black, drawings 52,800 Supplies 3,750 Sales 474,080 Sales Returns and Allowances 42,800 Rent revenue 1.200 Sales discounts 13.800 Cost of goods sold 301,010 Land 180.000 Advertising expense 2,270 Warehouse 70,800 Salaries expense 68 200 Accumulated depreciation-warehouse 13,275 Rent expense 18,150 Accounts payable 12.650 Insurance expense 4,140 Interest Payable 6,070 Interest expense 1,925 Unearned revenue 4.680 Accounts Receivable 20,000 Notes payable- Due Dec. 2022 42.000 Mortgage Payable- Due 2025 200,000 Transaction for the Month During the last month of the fiscal year, the company had the following transactions: 1. Signed a contract to sell goods for $1,600 per week starting the next month Collected $3,000 of the accounts receivable 3. Paid the telephone bill from last month of $650 that had not been recorded 4. Received $525 cash in advance from customers for merchandise to be delivered next month 5. Paid salaries, $3,100 cash 6. Owner withdrew $4,800 cash. Adjustient and additional data: 1. A count of supplies on October 31 shows $210 on hand 2. The Warehouse has an estimated 15-year useful life. 3. Of the mortgage payable, $60,000 must be paid on September 30 each year 4. An analysis of the Unearned Revenue account shows that 35% has been earned by October 31. 5. On October 31, services of $25,000 were provided but not recorded. 6. The mortgage payable has a d%% interest rate. Interest is paid on the first day of each month for the previous mouth's interest. 7. Employees earned $550 per day. On October 31, 7 employees were unpaid for 4 days. B. A 12-month insurance policy was purchase February 1, 2020 for $1,800 9. The telephone bill for the month was for $550, and at the end of the mouth it was not recorded or paid
