Alou Equipment Repair has a September 30 year end. The company adjusts and closes its accounts on an annual basis.
On August 31, 2021, the account balances of Alou Equipment Repair were as follows:
ALOU EQUIPMENT REPAIR
August 31, 2021
Accounts receivable $7,910
Accumulated depreciation—equipment $1,800
Accounts payable $3,100
Unearned revenue $400
J. Alou, capital $21,200
J. Alou, drawings $15,600
Service revenue $49,600
Rent expense $5,500
Salaries expense $24,570
Telephone expense $2,230
Total $76,100 $76,100
During September, the following transactions were completed:
Sept. 1 Borrowed $10,000 from the bank and signed a two-year, 5% note payable.
2 Paid September rent, $500.
8 Paid employee salaries, $1,050.
12 Received $1,500 cash from customers on account.
15 Received $5,700 cash for services performed in September.
17 Purchased additional supplies on account, $1,300.
20 Paid creditors $2,300 on account.
21 Paid September telephone bill, $200.
22 Paid employee salaries, $1,050.
27 Performed services on account and billed customers for services provided, $900.
29 Received $550 from customers for services to be provided in the future.
30 Paid J. Alou $800 cash for personal use.
Adjustment data consist of the following:
1.Supplies on hand at September 30 cost $1,000.
2.Accrued salaries payable at September 30 total $630.
3.The equipment has an expected useful life of five years.
4.Unearned revenue of $450 is still not earned at September 30.
5.Interest is payable on the first of each month.
a. Prepare T accounts and enter the August 31 balances.
b. Journalize the September transactions.
c. Post to T accounts.
d. Create trial balance at September 30.
e. Journalize and post adjusting entries.
f. Create an adjusted trial balance at September 30.
g. Create an income statement and a statement of owner's equity, and a classified balance sheet.
h. Create and post closing entries.
i. make a post-closing trial balance at September 30.