Requirement #1:
During its first month of operation, the Melvin Plumbing Corporation, which specializes in residential plumbing,
completed the following transactions.

July 1 Began business by making a deposit in a company bank account of $90,000, in exchange
for 9,000 shares of $10 par value common stock.

July 3 Paid the current month’s rent, $5,500.

July 5 Paid the premium on a 1-year insurance policy, $4,800

July 7 Purchased supplies on account from Little Company, $900.

July 10 Paid employee salaries, $3,300

July 14 Purchased equipment from Lake Company, $11,500. Paid $1,500 down and the balance was
placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1.
Note: Use accounts payable for the balance due.

July 15 Received cash for plumbing revenue for the first half of July, $7,700

July 19 Made payment on account to Lake Company, $500.

July 31 Received cash for plumbing revenue for the last half of July, $8,505

July 31 Declared and paid cash dividends of $600

Prepare journal entries to record the July transactions in the General Journal below.

Use the following account names for journal entries.

Chart of Accounts: Account Title (Normal Balance)

Assets
Cash (Debit)
Prepaid Insurance (Debit)
Supplies (Debit)
Equipment (Debit)
Accumulated Depreciation – Equipment (Credit)

Liabilities
Accounts Payable (Credit)
Income Tax Payable (Credit)

Stockholders’ Equity
Common Stock (Credit)
Retained Earnings (Credit)
Dividends (Debit)

Revenue
Revenue (Credit)

Expenses
Rent Expense (Debit)
Salaries Expense (Debit)
Insurance Expense (Debit)
Supplies Expense (Debit)
Depreciation Expense (Debit)
Income Tax Expense (Debit)

This Sheet will be used for Requirements 2, 5, and 9.

Requirement #2:

Post the July journal entries to the following T-accounts and compute ending balances.
Requirement #3:

Prepare a trial balance for July in the space below.
Requirement #4:

Prepare adjusting entries using the following information in the General Journal
below. Show your calculations!

Requirement #5:

Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances.
Just add to the balances that are already listed.

Requirement #6:

Prepare an adjusted trial balance in the space below.
Requirement #7:

Prepare the financial statements for the Melvin Plumbing Corporation as of July 31 in the space below.
You will only be preparing the income statement, statement of retained earnings, and the balance sheet.
The statement of cash flows is a required financial statement, but is not required for this case study.

Requirement #8:

Prepare the closing entries at July 31 in the General Journal below.

Requirement #9:

Post the closing entries to the General Ledger T-accounts and compute ending balances.
Just add to the adjusted balances already listed.

Requirement #10:

Prepare a post-closing trial balance as of July 31 in the space below.

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