This corporation sells office products and performs accounting services.

L & M uses the Perpetual Inventory system and had the following balances:

L & M Office Supplies and Services

Trial Balance

August 1, 2021

Title	Debit	Credit
Cash	9,200
Accounts Receivable	2,400
Merchandise Inventory	2,100*
Supplies	860
Equipment	23,000
Accumulated Depreciation		1,500
Accounts Payable		3,300
Unearned Service Revenue		3,600
Salaries and Wages Payable		1,775
Common Stock		20,000
Retained Earnings		7,385
Totals	$37,560	$37,560

*(3,000 units at $0.70)

This is a simulated problem showing some summary transactions that occurred during the month of August.

Aug 2 Paid Augusts rent $400.

3 Purchased 4,000 units of inventory from dds Discount Supply on account at $0.75 each. Terms 2/10, n/30.

4 Sold 4,400 units of inventory for cash at $0.96 per unit. (Sold 3,000 of the 0.70 units and 1,400 of the $0.75 units)

5 Gave an August 4^th customer $192 for 200 units returned costing $150. (These units were returned to inventory)

6 Paid $3,550 for salaries due employees, of which 1,775 is for July and $1,775 is for August.

9 Paid $2,800 on account. (No discounts)

10 Received $2,000 cash from customers in payment on account. (July salesno discounts)

12 Paid dds Discount Supply in full, less discount.

13 Purchased 5,000 units of inventory on account Office Headquarters at $0.80 each. Terms 2/10, n/30.

16 Sold 4,000 units of inventory to customers on account at $0.99 per unit. Terms 2/10, n/30. (Sold 2,800 of the 0.75 units and 1,200 of the 0.80 units)

19 Received $4,150 Cash for services performed in August.

20 Paid Salaries $3,550.

24 Purchased supplies on account $1,500.

25 Received collections in full, less discount, from customers billed for sales on August 16^th. (Round to whole dollars.)

30 Paid Office Headquarters in full. (No discount)

30 Performed services on account and billed customers $1,750.

31 Received $1,500 from customers for services to be performed in September.

Adjustment Data:

1. Supplies on hand are valued at $1,350.
2. Accrued salaries are $2,485.
3. Depreciation for the month is $250.
4. $1,650 of services related to the unearned service revenue has not been earned by month end.

Instructions:

1. Enter the August 1, balances in ledger accounts.
2. Journalize the August transactions.
3. Post to the ledger accounts. HINT: You will need to add some accounts to the beginning ones available.
4. Prepare a Trial Balance as of August 31^st.
5. Journalize the Adjusting Entries.
6. Post the Adjusting Entries.
7. Prepare an Adjusted Trial Balance at August 31, 2021.
8. Journalize the Closing Entries (Do Not Post)