Palisade Creek Co. is a merchandising business that uses the perpetual inventory system, accounting homework help
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows:
110Cash$ 83,600112Accounts Receivable233,900115Merchandise Inventory624,400116Estimated Returns Inventory28,000117Prepaid Insurance16,800118Store Supplies11,400123Store Equipment569,500124Accumulated Depreciation-Store Equipment56,700210Accounts Payable96,600211Salaries Payable—212Customers Refunds Payable50,000310Common Stock100,000311Retained Earnings585,300312Dividends135,000313Income Summary—410Sales5,069,000510Cost of Merchandise Sold2,823,000520Sales Salaries Expense664,800521Advertising Expense281,000522Depreciation Expense—523Store Supplies Expense—529Miscellaneous Selling Expense12,600530Office Salaries Expense382,100531Rent Expense83,700532Insurance Expense—539Miscellaneous Administrative Expense7,800During May, the last month of the fiscal year, the following transactions were completed:
Record the following transactions on page 20 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
May1Paid rent for May, $5,000. 3Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000. 4Paid freight on purchase of May 3, $600. 6Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the merchandise sold was $41,000. 7Received $22,300 cash from Halstad Co. on account. 10Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000. 13Paid for merchandise purchased on May 3. 15Paid advertising expense for last half of May, $11,000. 16Received cash from sale of May 6. 19Purchased merchandise for cash, $18,700. 19Paid $33,450 to Buttons Co. on account. 20Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000.Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
May20Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the merchandise sold was $70,000. 21For the convenience of Crescent Co., paid freight on sale of May 20, $2,300. 21Received $42,900 cash from Gee Co. on account. 21Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000. 24Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. 26Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800. 28Paid sales salaries of $56,000 and office salaries of $29,000. 29Purchased store supplies for cash, $2,400. 30Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the merchandise sold was $47,000. 30Received cash from sale of May 20 plus freight paid on May 21. 31Paid for purchase of May 21, less return of May 24. Required:1.Enter the May 1 balances of each of the accounts in the appropriate balance column of a four-column account. Enter May 1 in the date column. WriteBalance in the item section, and place a check mark (√) in the Posting Reference column. Journalize the transactions for July, starting on Page 20 of the journal.*2.Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.3.Prepare an unadjusted trial balance.4.At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).•Merchandise inventory on May 31, $570,000•Insurance expired during the year, $12,000•Store supplies on hand on May 31, $4,000•Depreciation for the current year, $14,000•Accrued salaries on May 31: Sales salaries, $7,000 Office salaries, $6,600 Total accrued salaries: $13,600•The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of merchandise sold.5.(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.6.A.Journalize the adjusting entries. Record the adjusting entries on Page 22 of the journal.*B.Post the adjusting entries.7.Prepare an adjusted trial balance.8.