Review the opening account balances in Winters Company's general and subsidiary ledgers on January 1, 2021. All accounts have normal debit and credit balances. Winters uses a perpetual inventory system. The cost of all merchandise sold was 40% of the sales price. Assume Winters Company reports under ASPE.

General Ledger
Account No.	Account Title	January 1, 2021 Opening Balance
101	Cash	$ 35,050
112	Accounts receivable	14,000
115	Notes receivable	39,000
120	Merchandise inventory	20,000
125	Supplies	1,000
130	Prepaid insurance	2,000
140	Land	50,000
145	Building	100,000
146	Accumulated depreciationbuilding	25,000
157	Equipment	6,450
158	Accumulated depreciationequipment	1,500
201	Accounts payable	36,000
275	Mortgage payable	125,000
301	A. Winters, capital	80,000

Accounts Receivable Subsidiary Ledger
Customer	January 1, 2021 Opening Balance
R. Draves	$1,500
B. Jacovetti	7,500
S. Tang	5,000

Accounts Payable Subsidiary Ledger
Creditor	January 1, 2021 Opening Balance
Liazuk Co.	$10,000
Mikush Bros.	15,000
Nguyen & Son	11,000

Winters' January transactions follow:

Jan. 3	Sold merchandise on credit to B. Sota $3,100, invoice no. 510, and J. Ebel $1,800, invoice no. 511.
5	Purchased merchandise on account from Welz Wares for $3,000 and Laux Supplies for $2,700.
7	Received cheques for $5,000 from S. Tang and $2,000 from B. Jacovetti on accounts.
8	Paid freight on merchandise purchased, $180.
9	Sent cheques to Liazuk Co. for $10,000 and Nguyen & Son for $11,000 in full payment of accounts.
9	Issued credit memo for $400 to J. Ebel for merchandise returned. The merchandise was restored to inventory.
10	Summary cash sales totalled $16,500.
11	Sold merchandise on credit to R. Draves for $1,900, invoice no. 512, and to S. Tang for $900, invoice no. 513.
15	Withdrew $2,000 cash for Winters's personal use.
16	Purchased merchandise on account from Nguyen & Son for $15,000, from Liazuk Co. for $13,900, and from Welz Wares for $1,500.
17	Purchased supplies on account from Laux Supplies, $400.
18	Returned $500 of merchandise to Liazuk and received credit.
20	Summary cash sales totalled $17,500.
21	Issued $15,000 note to Mikush Bros. in payment of balance due. The note bears an interest rate of 10% and is due in three months.
21	Received payment in full from S. Tang.
22	Sold merchandise on credit to B. Soto for $1,700, invoice no. 514, and to R. Draves for $800, invoice no. 515.
23	Sent cheques to Nguyen & Son and Liazuk Co. in full payment of accounts.
25	Sold merchandise on credit to B. Jacovetti for $3,500, invoice no. 516, and to J. Ebel for $6,100, invoice no. 517.
27	Purchased merchandise on account from Nguyen & Son for $14,500, from Laux Supplies for $1,200, and from Welz Wares for $2,800.
28	Purchased supplies on account from Laux Supplies, $800.
31	Summary cash sales totalled $19,920.
31	Paid salaries of $6,900.
31	Received payment in full from B. Soto and J. Ebel on account.

In addition to the accounts identified in the trial balance, the chart of accounts shows the following: No. 200 Notes Payable, No. 230 Interest Payable, No. 300 Income Summary, No. 310 A. Winters, Drawings, No. 401 Sales, No. 410 Sales Returns and Allowances, No. 505 Cost of Goods Sold, No. 711 Depreciation Expense, No. 718 Interest Expense, No. 722 Insurance Expense, No. 725 Salaries Expense, and No. 728 Supplies Expense.

Instructions

1. Record the January transactions in the appropriate journalsales, purchases, cash receipts, cash payments, and general.
2. Enter the opening balances in general and subsidiary ledger accounts. Post the journals to the general and subsidiary ledgers. New accounts should be added and numbered in an orderly fashion as needed.
3. Prepare an unadjusted trial balance at January 31, 2021. Determine whether the subsidiary ledgers agree with the control accounts in the general ledger.
4. Prepare and post adjusting journal entries. Prepare an adjusted trial balance, using the following information:
   1. Supplies at January 31 total $700.
   2. Insurance coverage expires on September 30, 2021.
   3. Annual depreciation on the building is $6,000 and on the equipment is $1,500.
   4. Interest of $45 has accrued on the note payable.
   5. A physical count of merchandise inventory has found $44,850 of goods on hand.
5. Prepare a multiple-step income statement and a statement of owner's equity for January, and a classified balance sheet at the end of January.
6. Prepare and post the closing entries.
7. Prepare a post-closing trial balance.