FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Comprehensive Problem 2
Part 1 and Part 2:
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May
1, 20Y7 (unless otherwise indicated), are as follows:
110
Cash
$83,600
112
Accounts Receivable
233,900
115
Merchandise Inventory
652,400
117
Prepaid Insurance
16,800
118
Store Supplies
11,400
123
Store Equipment
569,500
124
Accumulated Depreciation-Store Equipment
56,700
210
Accounts Payable
96,600
211
Customer Refunds Payable
50,000
212
Salaries Payable
310
Lynn Tolley, Capital, June 1, 20Y6
685,300
311
Lynn Tolley, Drawing
135,000
410
Sales
5,069,000
510
Cost of Merchandise Sold
2,823,000
520
Sales Salaries Expense
664,800
521
Advertising Expense
281,000
522
Depreciation Expense
523
Store Supplies Expense
529
Miscellaneous Selling Expense
12,600
530
Office Salaries Expense
382,100
531
Rent Expense
83,700
532
Insurance Expense
539
Miscellaneous Administrative Expense
7,800
Part 1: Using the attached spreadsheet, journalize the transactions for May, the last month of the fiscal year, below
Transcribed Image Text:Part 2: Post the journal to the general ledger you created in Part 1, 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.
If an amount box does not require an entry, leave it blank.
1: Paid rent for May, $5,000.
May 3: Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
May 4: Paid freight on purchase of May 3, $600.
May 6: Sold 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.
May 7: Received $22,300 cash from Halstad Co. on account.
May 10: Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.
May 13: Paid for merchandise purchased on May 3.
May 15: Paid advertising expense for last half of May, $11,000.
May 16: Received cash from sale of May 6.
May 19: Purchased merchandise for cash, $18,700.
May 19: Paid $33,450 to Buttons Co. on account.
May 20: Paid Korman Co. a cash refund of $5,000 for damaged merchandise from sale of May 6. Korman Co. kept the merchandise.
May 20: Sold 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.
May 21: For the convenience of Crescent Co., paid freight on sale of May 20, $2,300.
May 21: Received $42,900 cash from Gee Co. on account.
May 21: Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
May 24: Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
May 26: Refunded cash on sales made for cash, $800. The defective merchandise was not returned by the customer.
May 28: Paid sales salaries of $56,000 and office salaries of $29,000.
May 29: Purchased store supplies for cash, $2,400.
May 30: Sold 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.
May 30: Red
May 31: Paid for purchase of May 21, less return of May 24.
cash from sale
May 20 plus freight paid on May 21.
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