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 month's (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 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Buildings 168 Accumulated Depreciation-Buildings 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 403 Commissions Revenue 612 Depreciation Expense-Buildings 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary 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 month's 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. 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Buildings 168 Accumulated Depreciation-Buildings 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 403 Commissions Revenue 612 Depreciation Expense-Buildings 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary I 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 month's 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
