341 Chapter 6 Accounting for Merchandising Businesses 3. Prepare the desing entries for Sienkins Company as of June 30, 2049 What would the net income have been in the perpetual inventory system had been wed Comprehensive Problem 2 Rico S. 211 21000 Paliate Creek Co is a merchandising business that we the perpetual inventory The account balances for Patinade Greck Co. of May 1, 2017 Conless otherwise indicated), are as follows: 110 Cash 581,600 12 Account Recable 233.000 115 Merchando 652.400 112 Preparar 118 Store Supplies 51.00 123 Store quit 5.500 Accumulated Depreciation Store foment 210 Account Pay 90.000 Customer Refunds Payable 50.000 212 San Payable 310 Lynn Tolley, Cape 2016 100 311 Lynn Tolley 135.00 410 5.000 510 Cost of Merchandise Sold 520 Sales Sales Expense 521 Advertising pese 281.000 522 Deprecation pense 523 Store Supplies Expense 529 Miscellaneous Selling pense 12.600 530 Office Solaris tense 389.100 511 Hent Exponse 31700 532 Insurance Expense 599 Miscellaneous Anistrative per 7.000 During May, the last month of the fiscal year, the following transactions were completed: May 1 Paid rent for May, $5.000, 3. Purchased merchandise on account from Martin Co., terms 2/10, 1/30, FOB shipping point, $36,000 Paid freight on purchase of May 3, 5600 6. Sold merchandise on account to Korman Coterms 2/10, 90, FOB shipping point, 568.500 The cost of the merchandise sold was 541,000 7 Received $22.300 cash from Harstad Co on account 10. Sold merchandise for cash, 551.000. The cost of the merchandise sold was $32,000. 13 Paid for merchandise purchased on May 3 15 Paid advertising expense for lan half of May, $11,000 16. Received cash from sale of May 6. 19. Purchased merchandise for cash, $18,700 19. Paid $33.450 to Buttons Co. on account 20. Paid Korman Co a cash refund of $5,000 for damaged merchandise from sale or May 6. Korman Co kept the merchandise (Continued) 342 Chapter 6 Accounting for Merchandising Businesses May 20 Sold merchandise on account to Crescent Co, terms 1/10,n30, FOB shipping Record the following machines Page 21 of the journal point, $110.000 The cost of the merchandise sold was $70,000 21. For the convenience of Crescent Co. paid freight on sale of May 20, 52.300 21. Received $12.900 cash from Gee Co on account 21. Purchased merchandise on account from Oscan Co, terms 1/10, n. FOR destination, S.000, 24. Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5.000. 26 Refunded cash on sales made for cash, $800. The defective merchandise returned by the customer 28. Paid ales salaries of $56,000 and office salaries of $29,000 29. Purchased store supplies for cash, $2.400 30. sold merchandise on account to Turner Co. terms 2/10, 1/30, POB shipping point, $78,750. The cost of the merchandise sold was $47.000 30. Received cash from sale of May 20 plus freight paid on May 21 31. Paid for purchase of May 21, less return of May 24 Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark in the Posting Reference column. Journalize the transactions for May, starting on race 20 of the journal 2. Poss the journal to the general ledger, extending the month-end balances to the appropri balance columns after all posting is completed. In this problem, you are not required update or post to the accounts receivable and accounts payable subsidiary ledger 3. Prepare an unadjusted trial balance At the end of May, the following adjustment data were assembled. Analyze and se these data to complete (5) and (6). a Merchandise inventory on May 31 5585,200 b Insurance expired during the year 12,000 c. Store supplies on hand on May 31 4,000 d Depreciation for the current year 14.000 e Accrued salaries on May 31: Sales salaries $7,000 Office salaries 6,600 13,600 The adjustment for customer refunds and allowance is $60,000 5. (Optional) Enter the unadjusted trial balance on a 10-column end-of-period spread sheet (work sheet), and complete the spreadsheet. 6. Journalive and post the adjusting entries. Record the adjusting entries on Page 22 the journal 7. Prepare an adjusted trial balance, 8. Prepare an income statement, a statement of owner's equity, and a balance sheet 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. Insert the new balance in the owner's capital account 10. Prepare a post-closing trial balance