Question

On August 1, 2018, the beginning of its current fiscal year, the following opening account balances, listed in alphabetical order, were reported by Tobique Ltd. Accounts payable $2,500 Interest receivable 20 Accounts receivable 4,740 Note receivable, due October 31, 2018 4,000 Accumulated depreciation—equipment 2,030 Retained earnings 6,040 Cash 5,520 Salaries payable 1,460 Common shares 12,000 Supplies 1,030 Equipment 10,100 Unearned revenue 1,380 During August, the following summary transactions were completed. Aug. 1 Paid $440 cash for advertising in local newspapers. Advertising flyers will be included with newspapers delivered during August and September. (Hint: Use the Prepaid Advertising account.) 3 Paid August rent $380. (Hint: Use the Prepaid Rent account.) 6 Received $3,040 cash from customers in payment of accounts. 10 Paid $2,910 for salaries due employees, of which $1,450 is for August and $1,460 is for July salaries payable. 13 Received $4,100 cash for services performed in August. 15 Purchased additional equipment on account $1,910. 17 Paid creditors $1,910 of accounts payable due. 22 Purchased supplies on account $720. 24 Paid salaries $3,110. 27 Performed services worth $4,400 on account and billed customers. 29 Received $750 from customers for services to be provided in the future. 31 Declared and paid a $550 dividend.

1.		One month’s worth of advertising services have been received.
2.		The August rent has expired.
3.		Accrued salaries payable are $1,670.
4.		Depreciation for the month is $203.
5.		Supplies on hand at August 31 are $1,000.
6.		Services were performed to satisfy $790 of unearned revenue.
7.		One month of interest revenue related to the $4,000 note receivable has accrued. The note was issued on June 30 and is due October 31 and has a 6% annual interest rate. Interest is due at maturity.
8.		Income tax of $290 is estimated to be owed for the month of August.

Prepare the August adjusting journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required,

(D)

Post the August adjusting journal entries and calculate and enter end balances. (Post entries in the order of journal entries presented in the previous part. If the ending balance is 0 select Bal for the date and enter 0 for the normal balance for that account.)

Answer 1

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