Before starting the July operating entries, you must close out all June activity from the temporary accounts. Be sure to date the two closing entries as of June 30th and close the accounts directly to Retained Earnings. Post them to the June general ledger t-accounts. Then transfer the ending balances of all permanent accounts to the beginning balances (BB) in July's general ledger T-accounts. Please round all amounts to the nearest dollar.
Month Two operating entries
Reminder: Your business choose to charge $8.00 for dog walking and $4.00 for pet-sitting. The pet food sales price per package is $3.00
1-Jul You must pay the rental deposit and rent expense for the month of July. $1,800
#2-1
1-Jul The 10 kennels and other materials that you ordered are delivered to your
#2-2 new shop location. The total cost is $4,000. You pay 25% down and finance the remainer of the cost with a six month loan. Record this entry.
3-Jul You pay for all of the advertising for the second month of $400 .
#2-3
You receive the first shipment of pet food for the month.
5-Jul Total Total
#2-4 units cost
Food 106 $159
This purchase is made on account. The credit terms are 2/10, n30. You intend to take the discount therefore you record the invoice using the net method.
7-Jul You pay all of the payroll taxes that were recorded in the June 28th #2-5 payroll entry.
7-Jul Record revenues for services rendered and pet food sold for the first week of July.
#2-6
Total number of 30 minute intervals of dog walking 128
Total number of visits to animals for pet-sitting 56
Total number of packages of pet food sold 68
(Use the perpetual method of recording revenues and COGS.)
10-Jul As stockholders of the company, you decide to declare a dividend equal to 10% of #2-7 June's net income. If you had a loss in June, no entry is required. The dividend will be paid on July 15.
10-Jul Paid the amounts due for the inventory received on July 3 in #2-8 transaction #2-3. You receive the discount.
10-Jul The amount owed to Pets R Us should be paid today. Refer to the #2-9 June 10 transaction (#1-9) to determine this amount.
15-Jul You receive the telephone bill for June. You pay the bill immediately.
#2-10 The amount of the bill is approximately the same as last month's accrual but is slightly more. The bill is for $61 .
15-Jul The dividend declared in transaction #2-7 is paid.
#2-11
15-Jul Record revenues for services rendered and pet food sold for the past week.
#2-12
Total number of 30 minute intervals of dog walking 71
Total number of visits to animals for pet-sitting 32
Total number of packages of pet food sold 38
15-Jul You receive the second shipment of pet food product for the month.
#2-13 Total Total
units cost
Food 61 $92
This purchase is made on account. The credit terms are 2/10, n30. You intend to take the discount therefore you record the invoice using the net method.
20-Jul You purchase additional office supplies on account from DJ's Mercantile.
#2-14 The amount of the charge, due in 30 days, is $120 .
No credit terms are offered from this vendor.
30-Jul You pay the owners their wages for the month of July. The total amount of #2-15 $1,200 is just for four weeks. The withholdings will be accrued and remitted in the following month.
The employer is required to withhold the following from the employees' paychecks:
Federal income tax 10%
State income tax 5%
Social Security tax 6.2%%
Medicare 1.45%
The employer's payroll tax expenses are:
Social Security tax 6.2%
Medicare 1.45%
FUTA 0.8%
SUTA 2.8%
SUTA 2.8%
The payment for these accrued payroll taxes will be paid out in August.
30-Jul Paid the amounts due for the pet food inventory received on July 20 in transaction
#2-16 #2-13. You missed paying within the discount period and do NOT receive
the discount.
30-Jul Record revenues for services rendered and pet food sold for the remaining days
#2-17 of the month.
Total number of 30 minute intervals of dog walking 86
Total number of visits to animals for pet-sitting 38
Total number of packages of pet food sold 46
Adjusting Entries
This is the end of the second month of operating activity. Post the general journal entries to the General Ledger T-accounts. Verify that all debit and credits balance. Then, prepare the adjusting entries for the end of July. Date these entries July 31st.
Adjust. 1 A count of the office and pet supplies on hand at the end of the month was performed.
#2-18 The amount remaining in inventory is
Adjust. 2 Howlsville and Miaowsville at Kirksville
#2-19 It is estimated to be
Adjust. 3 You will also accrue an estimate for utilities at your new store location. The amount is
#2-20 etimated to be
Adj. 4 to 6 There are three other adjusting entries that need to be made based on the information
#2-21 to provided in the June transactions. (Hint: Two of these entries will be the same as June's,
#2-23 the third is dependant upon an additional July transaction.)
This should complete all of the entries for your July financial period.
Post all journal entries and adjusting journal entries to the general ledger T-accounts.