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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:


Trial Balance

August 31, 2021


Debit Credit

Cash $2,790


Accounts receivable $7,910


Supplies $8,500


Equipment $9,000


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.

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