Completing the Accounting Cycle for a Merchandising Entity—Using Special Journals Amherst Networking Systems adjusts and closes its books and then prepares financial statements monthly. Amherst uses the perpetual inventory system and all sales on credit have terms of n/30. The company completed the following transactions during August:
Requirements 1. Open these four-column accounts with their account numbers and July 31 balances in the various ledgers.
Accounts Receivable Subsidiary Ledger: Friend Company $2,400; R. T. Loeb, $0; Parker, Inc., $11,300; and K. D. Sanders, $8,790. Accounts Payable Subsidiary Ledger: Bradford Corporation, $0; Filter Company, $12,700; Goldner, Inc., $0; and Seacrest Supply, $0. 2. Journalize the August transactions using a sales journal (page 4), a cash receipts journal (page 11, omit Sales Discounts Forfeited column), a purchases journal (page 8), a cash payments journal (page 5), and a general journal (page 9). 3. Post daily to the accounts receivable subsidiary ledger and the accounts payable subsidiary ledger. On August 31, post to the general ledger. 4. Prepare an unadjusted trial balance for the month ended August 31. 5. Journalize and post the following adjusting entries: a. Office supplies on hand, $1,000. b. Prepaid insurance expired, $350. c. Depreciation expense on furniture, $250. d. Accrued salaries expense, $1,060. 6. Prepare an adjusted trial balance. 7. Prepare a multistep income statement, statement of retained earnings, and classified balance sheet. 8. Journalize closing entries and post. 9. Prepare a post-closing trial balance.
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