Assume it is Monday, May 1, the first business day of the month, and you have just been hired as the accountant for Colo Company, which operates with monthly accounting periods. All of the companys accounting work is completed through the end of April, and its ledgers show April 30 balances. During your first month on the job, the company experiences the following transactions and events (terms for all its credit sales are 2/10, n/30 unless stated differently):

May 1	Issued Check Number 3410 to S&P Management Company in payment of the May rent for $3,800. Charge $2,986 to Rent ExpenseSelling Space, and charge $814 to Rent ExpenseOffice Space. (Use two lines to record the transaction.)
May 2 (a)	Sold merchandise on credit to Hensel Company, Invoice Number 8785, for $7,000 (cost is $5,000).
May 2 (b)	Issued an allowance (price reduction) of $220 to Knox Company for merchandise sold on April 28. The total selling price (gross) was $4,770.
May 3	Issued a refund of $816 to Peyton Products for the return of merchandise purchased on April 29. Colo's accounts payable was reduced by that amount.
May 4	Purchased the following on credit from Gear Supply Company: merchandise, $37,090; store supplies, $592; and office supplies, $92. Invoice dated May 4, terms n/30.
May 5	Received payment from Knox Company for the balance from the April 28 ($4,550) sale less the May 2 return and the $91 discount.
May 8	Issued Check Number 3411 to Peyton Products to pay for the $7,143 of merchandise purchased on April 29 less the May 3 return and the $144 discount.
May 9	Sold store supplies (noninventory) to the business next door at their cost of $377 cash. Hint: Enter Store Supplies only in the Account Credited column.
May 10	Purchased $4,128 of office equipment on credit from Gear Supply Company, terms n/30.
May 11 (a)	Received payment from Hensel Company for the May 2 sale less the discount of $140.
May 11 (b)	Purchased $9,700 of merchandise from Garcia, Incorporated, terms 2/10, n/30.
May 12	Received a(n) $908 price reduction from Gear Supply Company for the return of office equipment received on May 10. Colo debited accounts payable by that amount.
May 15 (a)	Issued Check Number 3412, payable to Payroll, in payment of sales salaries, $5,410, and office salaries, $3,240.
May 15 (b)	Cash sales for the first half of the month are $59,400 (cost is $38,380). These cash sales are recorded in the cash receipts journal on May 15.
May 15 (c)	Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts.
May 16	Sold merchandise on credit to Hensel Company, Invoice Number 8786, for $4,080 (cost is $1,980).
May 17	Purchased $13,740 of merchandise from Fink Corporation, terms 2/10, n/60.
May 19	Issued Check Number 3413 to Garcia, Incorporated, in payment of its May 11 purchase less the discount of $221.
May 22	Sold merchandise to Lee Services, Invoice Number 8787, for $6,940 (cost is $5,080), terms 2/10, n/60.
May 23	Issued Check Number 3414 to Fink Corporation in payment of its May 17 purchase less the discount of $291.
May 24	Purchased the following on credit from Gear Supply Company: merchandise, $8,300; store supplies, $720; and office supplies, $460. Terms n/30.
May 25	Purchased $3,260 of merchandise from Peyton Products, terms 2/10, n/30.
May 26 (a)	Sold merchandise on credit to Crane Corporation, Invoice Number 8788, for $14,300 (cost is $8,410).
May 26 (b)	Issued Check Number 3415 to Perennial Power in payment of the May electric bill, $1,301.
May 29	The owner of Colo Company, Jenny Colo, used Check Number 3416 to withdraw $7,000 cash from the business for personal use.
May 30 (a)	Received payment from Lee Services for the May 22 sale less the discount of $146.
May 30 (b)	Issued Check Number 3417, payable to Payroll, in payment of sales salaries, $5,410, and office salaries, $3,240.
May 31 (a)	Cash sales for the last half of the month are $66,124 (cost is $42,545). These cash sales are recorded in the cash receipts journal on May 31.
May 31 (b)	Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts. Foot and crossfoot the journals and make the month-end postings. 2-a. Complete the work sheet using the following information for accounting adjustments. Prepare and post adjusting and closing entries. a. Expired insurance, $562. b. Ending store supplies inventory, $2,641. c. Ending office supplies inventory, $513. d. Depreciation of store equipment, $576. e. Depreciation of office equipment, $338. 2-b. Prepare all necessary ledgers for accounting adjustments. 2-c. Prepare a work sheet for the month ended May 31. 3-a. Prepare a May multiple-step income statement. 3-b. Prepare a May statement of owners equity. 3-c. Prepare a May 31 classified balance sheet. 4-a. Prepare a post-closing trial balance. 4-b1. Prove the accuracy of subsidiary ledgers by preparing schedules of accounts receivable. 4-b2. Prove the accuracy of subsidiary ledgers by preparing schedules of accounts payable.

Record the expired insurance, $562. Note: Enter debits before credits. Credit Date May 31 General Journal Insurance expense Prepaid insurance Debit 562 5621 Record entry Clear entry View general journal Journal entry worksheet 2 2 3 4 5 6 7 8 9 > Record the ending store supplies inventory, $2,641. Note: Enter debits before credits. Credit Date May 31 General Journal Store supplies expense Store supplies Debit 2,641 2,641 Record entry Clear entry View general journal Rea 2A Reg 2B > Journal entry worksheet 2 3 4 5 6 7 8 9 Record the ending office supplies inventory, $513. Note: Enter debits before credits. Debit Credit Date May 31 General Journal Office supplies expense Office supplies 513 513 Record entry Clear entry View general journal Journal entry worksheet Record the depreciation of store equipment, $576. Note: Enter debits before credits. Date Debit Credit May 31 General Journal Depreciation expenseStore equipment Accumulated depreciationStore equipment 576 576 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 6 7 8 9 > Record the depreciation of office equipment, $338. Note: Enter debits before credits. Debit Credit Date May 31 General Journal Depreciation expense-Office equipment Accumulated depreciationOffice equipment 338 338) Record entry Clear entry View general journal Journal entry worksheet Record the closing of temporary accounts with credit balances. Note: Enter debits before credits. Credit Date May 31 General Journal Sales Income summary Debit 157,844 157,844 Record entry Clear entry View general journal Journal entry worksheet Record the closing of income summary to owner's capital. Debit Note: Enter debits before credits. Date General Journal May 31 Income summary J. Colo, Capital Credit Record entry Clear entry View general journal Journal entry worksheet 1 2 3 4 5 6 7 8 8 9 Record the closing of withdrawals to owner's capital. Note: Enter debits before credits. Debit Credit Date May 31 General Journal J. Colo, Capital J. Colo, Withdrawals Record entry Clear entry View general journal Record the expired insurance, $562. Note: Enter debits before credits. Credit Date May 31 General Journal Insurance expense Prepaid insurance Debit 562 5621 Record entry Clear entry View general journal Journal entry worksheet 2 2 3 4 5 6 7 8 9 > Record the ending store supplies inventory, $2,641. Note: Enter debits before credits. Credit Date May 31 General Journal Store supplies expense Store supplies Debit 2,641 2,641 Record entry Clear entry View general journal Rea 2A Reg 2B > Journal entry worksheet 2 3 4 5 6 7 8 9 Record the ending office supplies inventory, $513. Note: Enter debits before credits. Debit Credit Date May 31 General Journal Office supplies expense Office supplies 513 513 Record entry Clear entry View general journal Journal entry worksheet Record the depreciation of store equipment, $576. Note: Enter debits before credits. Date Debit Credit May 31 General Journal Depreciation expenseStore equipment Accumulated depreciationStore equipment 576 576 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 6 7 8 9 > Record the depreciation of office equipment, $338. Note: Enter debits before credits. Debit Credit Date May 31 General Journal Depreciation expense-Office equipment Accumulated depreciationOffice equipment 338 338) Record entry Clear entry View general journal Journal entry worksheet Record the closing of temporary accounts with credit balances. Note: Enter debits before credits. Credit Date May 31 General Journal Sales Income summary Debit 157,844 157,844 Record entry Clear entry View general journal Journal entry worksheet Record the closing of income summary to owner's capital. Debit Note: Enter debits before credits. Date General Journal May 31 Income summary J. Colo, Capital Credit Record entry Clear entry View general journal Journal entry worksheet 1 2 3 4 5 6 7 8 8 9 Record the closing of withdrawals to owner's capital. Note: Enter debits before credits. Debit Credit Date May 31 General Journal J. Colo, Capital J. Colo, Withdrawals Record entry Clear entry View general journal