Question

On August 1, 2020, Mark Diamond began a tour company in the Northwest Territories called Millennium Arctic Tours. The following occurred during the first month of operations:

Aug.	1	Purchased office furniture on account; $5,300.
	1	Mark Diamond invested $7,100 cash into his new business.
	2	Collected $4,050 in advance for a three-week guided caribou watching tour beginning later in August.
	3	Paid $6,150 for six months’ rent for office space effective August 1.
	4	Received $3,100 for a four-day northern lights viewing tour just completed.
	7	Paid $1,550 for hotel expenses regarding the August 4 tour.
	15	Mark withdrew cash of $600 for personal use.
	22	Met with a Japanese tour guide to discuss a $155,000 tour contract.
	31	Paid wages of $1,310.

Assume Mark Diamond uses the straight-line method to depreciate the assets.

Required:
1. Prepare General Journal entries to record the August transactions. (If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.)

2. Using the following information, prepare the adjusting entries on August 31. (If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.)

1. The office furniture has an estimated life of four years and a $260 residual value. Use the straight-line method to depreciate the furniture.

2. Two-thirds of the August 2 advance has been earned.

3. One month of the Prepaid Rent has been used.

4. The August telephone bill was not received as of August 31 but amounted to $330.

3. Post the entries to the accounts; calculate the ending balance in each account.

4. Prepare an adjusted trial balance.

5-a. Prepare a income statement for month ended August 31, 2020.

5-b. Prepare a statement of changes in equity for month ended August 31, 2020.

5-c. Prepare a balance sheet for month ended August 31, 2020. (Be sure to list the assets and liabilities in order of their liquidity.