4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete Part 6.

a.	Merchandise inventory on May 31			$585,200
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
f.	The adjustment for customer refunds and allowances is $60,000.

6. Journalize the adjusting entries. If an amount box does not require an entry, leave it blank. Post the adjusting entries to the attached spreadsheet you used in parts 1 and 2.

				Page 22
Date	Description	Post. Ref.	Debit	Credit
	Adjusting Entries
20Y7
May 31	Accounts ReceivableCashCost of Merchandise SoldInterest ExpenseMerchandise Inventory
	CashCost of Merchandise SoldInterest ExpenseMerchandise InventorySales
May 31	Accounts PayableCashInterest ExpenseInsurance ExpensePrepaid Insurance
	Accounts PayableCashInterest ExpenseInsurance ExpensePrepaid Insurance
May 31	Accounts PayableCashCost of Merchandise SoldStore SuppliesStore Supplies Expense
	Accounts PayableCashMerchandise InventryStore SuppliesStore Supplies Expense
May 31	Accounts PayableAccumulated Depreciation-Store EquipmentCashDepreciation ExpenseStore Equipment
	Accounts PayableAccumulated Depreciation-Store EquipmentCashDepreciation ExpenseStore Equipment
May 31	Accounts PayableCashInterest ExpenseSales Salaries ExpenseSalaries Payable
	CashAccounts PayableInterest ExpenseOffice Salaries ExpenseSalaries Payable
	CashInterest ExpenseOffice Salaries ExpenseSales Salaries ExpenseSalaries Payable
May 31	Accounts PayableAccumulated Depreciation-Store EquipmentCashSalesService Revenue
	Accounts PayableAccumulated Depreciation-Store EquipmentCustomer Refunds PayableCustomer Refunds ReceivableCash

Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

Palisade Creek Co. Adjusted Trial Balance May 31, 20Y7
	Debit Balances	Credit Balances
Cash
Accounts Receivable
Merchandise Inventory
Prepaid Insurance
Store Supplies
Store Equipment
Accumulated DepreciationStore Equipment
Accounts Payable
Customer Refunds Payable
Salaries Payable
Lynn Tolley, Capital
Lynn Tolley, Drawing
Sales
Cost of Merchandise Sold
Sales Salaries Expense
Advertising Expense
Depreciation Expense
Store Supplies Expense
Miscellaneous Selling Expense
Office Salaries Expense
Rent Expense
Insurance Expense
Miscellaneous Administrative Expense