Sampson Company is owned by Gretta Sampson. This company is located in Amarillo, Texas and is a merchandising business. Gretta adopted a fiscal year that matches the calendar year. Assume it is Monday, October 1, 2019, the first business day of the month, and you have just been hired as the accountant for Sampson Company, which operates with monthly accounting periods. All of the company's accounting work is completed through the end of September, and its ledgers show September 30 balances. During your first month on the job, the company experiences the following transactions and events (terms for all its credit sales are 2/10, n/30 unless stated differently):

Oct 1 Issued Check No. 3410 to JRS Management Co. in payment of the October rent, $3,710. (Use two lines to record the transaction. Charge 80% of the rent to Rent ExpenseSelling Space and the balance to Rent Expense-Office Space.)

2 Sold merchandise on credit to Hensel Company, Invoice No. 8785, for $6,100 (cost is $4,100).

2 Issued a $175 credit memorandum to Knox Co. for defective (worthless) merchandise sold on September 28 and returned for credit. The total selling price (gross) was $4,725.

3 Received a $798 credit memorandum from Peyton Products for the return of merchandise purchased on September 29

4 Purchased the following on credit from Gear Supply Co.: merchandise, $37,072; store supplies, $574; and office supplies, $83. Invoice dated October 4, terms n/10 EOM.

5 Received payment from Knox Co. for the balance from the September 28.

8 Issued Check No. 3411 to Peyton Products to pay for the $7,098 of merchandise purchased on September 29, less a 2% discount.

9 Sold store supplies to the merchant next door at their cost of $350 cash. 10 Purchased $4.074 of office equipment on credit from Gear Supply Co., invoice dated October 10, terms n/10 EOM.

11 Received payment from Hensel Company for the October 2 sale.

11 Purchased $8,800 of merchandise from Garcia, Inc., invoice dated October 10, terms 2/ 10, n/30. 12 Received an $854 credit memorandum from Gear Supply Co. for the return of defective office equipment received on October 10.

15 Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,320, and off ice salaries, $3,150. Cashed the check and paid the employees.

15 Cash sales for the first half of the month are $59,220 (cost is $38,200). (Cash sales are recorded daily but are recorded only twice here to reduce repetitive entries.) 16 Sold merchandise on credit to Hensel Company, Invoice No. 8786, for $3,990 (cost is $1,890).

17 Purchased $13,650 of merchandise from Fink Corp., invoice dated October 14, terms 2/10, n/60.

19 Issued Check No. 34 I 3 to Garcia, Inc., in payment of its October 10.

22 Sold merchandise to Lee Services, Invoice No. 8787, for $6,850 (cost is $4,990), terms 2/10, n/60.

23 Issued Check No. 34 l 4to Fink Corp. in payment of its October 14 invoice.

24 Purchased the following on credit from Gear Supply Co.: merchandise, $8,120; store supplies, $630; and office supplies, $280. Invoice dated October 24, terms n/10 EOM.

25 Purchased $3,080 of merchandise from Peyton Products, invoice dated October 23, terms 2/10, n /30. 26 Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,210 (cost is $8,230).

26 Issued Check No. 3415 to Perennial Power in payment of the October electric bill, $1,283.

29 The owner of Sampson Company, Gretta Sampson, withdrew $7,000 cash from the business for personal use, Check No. 3416.

30 Received payment from Lee Services for the October 22 sale.

30 Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,320, and office salaries. $3,150. Cashed the check and paid the employees.

31 Cash sales for the last half of the month are $66,052 (cost is $42,500).

31 Foot and crossfoot the journals and make the month-end postings to the general ledger.

Required

1. Enter these transactions in a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, or a general journal as illustrated in this chapter. Assume a perpetual inventory system. Post daily to individual General Ledger accounts and to the subsidiary ledger accounts. Post month's end totals from the special journals to the General Ledger.

2. Prepare a trial balance in the Trial Balance columns of the work sheet form provided with the working papers. (Check: Cash $135,911) Complete the work sheet using the following information for accounting adjustments. a. Expired insurance, $553. b. Ending store supplies inventory, $2,632. c. Ending office supplies inventory, $504. d. Depreciation of store equipment, $567. e. Depreciation of office equipment, $329.

3. Journalize and post adjusting and closing entries.

4. Prepare an October 2019 multiple-step income statement, an October 2019 statement of owner's equity, and an October 2019 classified balance sheet.

5. Prepare a post-closing trial balance. Also prove the accuracy of subsidiary ledgers by preparing schedules of both accounts receivable and accounts payable.