Ocean Atlantic Co. is a merchandising business. t=The account balances for Ocean Atlantic Co. as of July 1, 2010 (unless otherwise indicated), are as follows: 110 Cash $63600 112 Accounts Receivable $153,900 115 Merchandise Inventory $602,400 116 Prepaid insurance $16,800 117 Store supplies $11,400 123 Store equipment $469,500 124 Accum. Depr. --Store equip $56,700 210 Accounts Payable $96,600 211 Salaries payable $- 310 Kevin Gilmore, Capital, August 1, 2011 - $55,300 311 Kevin Gilmore Drawing $135,000 312 Income summary $- 410 Sales $3,221,100 411 Sales return and allowances $92,700 412 Sales discounts $59,400 510 Cost of merchandise sold $1,623,000 520 sales salaries expense $334,800 521 advertising expense $81,000 522 depreciation expense $- 523 store supplies expense $- 529 misc. selling expense $12,600 530 Office salaries expense $182,100 531 Rent Expense $83,700 532 insurance expense $- 539 Misc. Administrative expense $7,800 During July, the last month of the fiscal year, the following transactions were completed: July 1, Paid rent for July, $4,000. 3, Purchased merchandise on account from Lingard Co., Terms 2/10, n/30, FOB shipping point, $25,000. 4, Paid freight on purchase of July 3, $1,000. 6, Sold merchandise on account to Holt Co., terms 2/10, n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $24,000. 7, Received $18,000 cash from Flatt Co. on account, no discount. 10, sold merchandise for cash $90,000. The cost of the merchandise sold was $50,000. 13, Paid for merchandise purchased on July 3, less discount. 14, Received merchandise returned on sale of July 6, $7,000. The cost of the merchandise returned was $4,500. 15, Paid advertising expense for last half of July, $9,000 16, received cash from sale of July 6, less return of July 14 and discount. 19, purchased merchandise for cash, $22,000. 19, Paid $23,100 to Carino Co. on account, no discount 20, sold merchandise on account to Reedley Co., terms 1/10, n/30, FOB shipping point, $40000. the cost of the merchandise sold was $25000. 21, for the convenience of the customer, paid freight on sale of July 20, $1,100. 21, received $17,600 cash from Owen co. on account, no discount. 21, purchased merchandise on account from Munson Co., terms 1/10, n/30, FOB Destination, $32,000. 24, Returned $5,000 of damaged merchandise purchased on July 21, receiving credit from the seller. 26, Refunded cash on sales made for cash, $12,000. The cost of the merchandise returned was $7,200. 28, paid sales salaries of $22,800 and office salaries of $15,200. 29, purchased store supplies for cash, $2,400. 30, Sold merchandise on account to Dix Co., terms 2/10, n/30, FOB shipping point, $18,750. The cost of the merchandise sold was $11,250. 30, received cash from sale of July 20, less discount, plus freight paid on July 21. 31, Paid for purchase of July 21, less return of July 24 and discount. Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark () in the posting reference column. Journalize the transactions for July. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are no required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare and unadjusted trial balance. 4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). a) Merchandise inventory on July 31 $565,000 b) Insurance expired during the year $13,400 c) Store supplies on hand on July 31 $3,900 d) Depreciation for the current year $11.500 e) Accrued salaries on July 31: Sale salaries $3,200 Office salaries $1,300 ($4,500) 5. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work Sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. 7. Prepare an adjusted trial balance 8. Prepare an income statement, a retained earnings statement, and a balance sheet. 9. Prepare and post the closing entries. Indicated closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the retained earnings account. 10. Prepare a post-closing trial balance