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248 CHAPTER 4 Completing the Accounting Cycle and Classifying Accounts CHECK FIGURES: 4. Net income Problem 4-13B Performing the steps in the accounting cycle LO2145,6 $5,140; On July 1, 2014, Amy Young created a new self-storage business called Young Co. These events occurred Total assets - $604,000 during the company's first month: 6. Post-closing trial balance - $606,400 July 1 Young invested $40,000 cash and land and buildings worth $320,000 and $240,000, respectively. Rented equipment by paying $3,600 rent for the first month. 5 Purchased $4,600 of office supplies for cash. 10 Paid $10,800 for the premium on a one-year insurance policy effective today. 14 Paid an employee $1,800 for two weeks' salary. 24 28 Collected $17,600 of storage fees from customers. Paid another $1,800 for two weeks' salary. 29 Paid the month's $600 phone bill. 30 31 Repaired leaking roof for $1,700 on account. Young withdrew $3,200 cash from the business for personal use. The company's chart of accounts included these accounts: 101 Cash 201 Accounts Payable 637 Insurance Expense 106 Accounts Receivable 209 Salaries Payable 640 Equipment Rental Expense 124 Office Supplies 301 Amy Young, Capital 650 128 Prepaid Insurance 302 Office Supplies Expense Amy Young, Withdrawals 684 Repairs Expense 170 Land 401 Storage Fees Earned 688 Telephone Expense 173 Buildings 606 Depreciation Expense, Buildings 901 Income Summary 174 Accumulated Depreciation, Buildings 622 Salaries Expense Required 1. Set up each of the listed accounts. Note: Your instructor will tell you to use either the balance column format or T-accounts. 2. Prepare journal entries to record the transactions for July and post them to the accounts. Record prepaid and unearned items in balance sheet accounts. 3. Use the following information to journalize and post the adjustments for the month: a. Two-thirds of one month's insurance coverage was consumed. b. There were $3,100 of office supplies on hand at the end of the month. c. Depreciation on the buildings was estimated to be $2,400 per month. d. The employee had earned $360 of unpaid and unrecorded salary. e. The company had earned $1,900 of storage fees that had not yet been billed. 4. Prepare an income statement, a statement of changes in equity, and a classified balance sheet. 5. Prepare journal entries to close the temporary accounts and post them to the accounts. 6. Prepare a post-closing trial balance