On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following

transactions occurred during the companies first month.

July 2

Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for its

common stock.

July 3

The company rented equipment by paying $2,000 cash for the first months (July) rent.

July 5

The company purchased $2,400 of office supplies for cash.

July 10

The company paid $7,200 cash for a 12-month insurance policy. Coverage begins on July 11.

July 14

The company paid $1,000 cash for two weeks' salaries earned by employees.

July 24

The company collected $9,800 cash for storage revenue from customers.

July 28

The company paid $1,000 cash for two weeks' salaries earned by employees.

July 29

The company paid $950 cash for minor repairs to buildings.

July 30

The company paid $400 cash for this month's telephone bill.

July 30

The company paid $2,000 cash in dividends.

The company's chart of accounts follows:

101

Cash

403

Commissions Revenue

106

Accounts Receivable

612

Depreciation ExpenseBuildings

124

Office Supplies

622

Salaries Expense

128

Prepaid Insurance

637

Insurance Expense

167

Buildings

640

Rent Expense

168

Accumulated DepreciationBuildings

650

Office Supplies Expense

209

Salaries Payable

684

Repairs Expense

307

Common Stock

688

Telephone Expense

318

Retained Earnings

901

Income Summary

319

Dividends

Required:

1.

Use the balance column format to set up each ledger account listed in its chart of accounts

2.

Prepare journal entries to record the transactions for July and post them to ledger accounts.

3.

Prepare an unadjusted trial balance as of July 31.

4.

Use the following information to prepare adjusting entries:

a.

Prepaid insurance of $400 expired this month.

b.

At the end of the month, $1,525 of office supplies are still available.

c.

This months depreciation on buildings is $1,500.

d.

Employees earned $100 of unpaid and unrecorded salaries as of month-end.

e.

The company earned $1,150 of storage revenue that is not yet recorded at month-end.

5a.

Using adjusted account balances, prepare an adjusted trial balance as of July 31.

5b.

Prepare the income statement for the month of July 31.

5c.

Prepare the statement of retained earnings for the month of July 31.

5d.

Prepare the balance sheet at July 31.

6a.

Prepare journal entries to close the temporary accounts.

6b

. Post these entries to the ledger.

7.

Prepare a post-closing trial balance