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 company's 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. 3 4 5 8 10 12 1 Issued Check No. 3410 to 5&P Management Co. in payment of the May rent for $3,710. Charge $2,968 to Rent Expense- Selling Space, and charge $742 to Rent Expense-Office Space. (Use two lines to record the transaction.) 2 (a) Sold merchandise on credit to Hensel Company, Invoice No. 8785, for $6,100 (cost is $4,100). 2 (b) Issued an allowance (price reduction) of $175 to Knox Co. for merchandise sold on April 28. The total selling price (gross) was $4,725. Issued a refund of $798 to Peyton Products for the return of merchandise purchased on April 29. Colo's accounts payable was reduced by that amount. Purchased the following on credit from Gear Supply Co.: merchandise, $37,072; store supplies, $574; and office supplies, $83. Invoice dated May 4, terms n/10 EOM. Received payment from Knox Co. for the balance from the April 28 ($4,550) sale less the May 2 return and the $91 discount. Issued Check No. 3411 to Peyton Products to pay for the $7,098 of merchandise purchased on April 29 less the May 3 return and the $126 discount. 9 Sold store supplies (noninventory) to the merchant next door at their cost of $350 cash. Purchased $4,074 of office equipment on credit from Gear Supply Co., terms n/10 EOM. 11 (a) Received payment from Hensel Company for the May 2 sale less the discount of $122. 11 (6) Purchased $8,800 of merchandise from Garcia, Inc., terms 2/10, n/30. Received a $854 price reduction from Gear Supply Co. for the return of office equipment received on May 10. Colo debited accounts payable by that amount. 15 (a) Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,320, and office salaries, $3,150. 15 (6) Cash sales for the first half of the month are $59,220 (cost is $38,200). These cash sales are recorded in the cash receipts journal on May 15. 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. Sold merchandise on credit to Hensel Company, Invoice No. 8786, for $3,990 (cost is $1,890). Purchased $13,650 of merchandise from Fink Corp., terms 2/10, n/60. Issued Check No. 3413 to Garcia, Inc., in payment of its May 11 purchase less the discount of $176. Sold merchandise to Lee Services, Invoice No. 8787, for $6,850 (cost is $4,990), terms 2/10, n/60. 23 Issued Check No. 3414 to Fink Corp. in payment of its May 17 purchase less the discount of $273. 24 Purchased the following on credit from Gear Supply Co.: merchandise, $8,120; store supplies, $630; and office supplies, $280. Terms n/10 EOM. Purchased $3,080 of merchandise from Peyton Products, terms 2/10, n/30. 26 (a) Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,210 (cost is $8,230). 26 (b) Issued Check No. 3415 to Perennial Power in payment of the May electric bill, $1,283. The owner of Colo Company, Jenny Colo, used Check No. 3416 to withdraw $7,000 cash from the business for personal use. 30 (a) Received payment from Lee Services for the May 22 sale less the discount of $137. 30 (b) Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,320, and office salaries, $3,150. 31 (a) Cash sales for the last half of the month are $66,052 (cost is $42,500). These cash sales are recorded in the cash receipts journal on May 31. 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. 16 17 19 22 25 29 Assume a perpetual inventory system. 2-a. Complete the work sheet using the following information for accounting adjustments. Prepare and post adjusting and closing entries. a. Expired insurance, $553. b. Ending store supplies inventory, $2,632. c. Ending office supplies inventory, $504. d. Depreciation of store equipment, $567. e. Depreciation of office equipment, $329. 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 owner's 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. Journal entry worksheet N Record the ending office supplies inventory, $504. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Record entry Clear entry View general journal Journal entry worksheet Record the depreciation of store equipment, $567. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Record entry Clear entry View general journal Journal entry worksheet Record the depreciation of office equipment, $329. Note: Enter debits before credits. General Journal Debit Credit Date May 31 Record entry Clear entry View general journal Journal entry worksheet Record the close temporary accounts with credit balances. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Record entry Clear entry View general journal Journal entry worksheet Record the close temporary accounts with credit balances. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Record entry Clear entry View general journal Journal entry worksheet Record the close temporary accounts with debit balances. Note: Enter debits before credits. General Journal Debit Credit Date May 31 Record entry Clear entry View general journal Journal entry worksheet Record the close income summary to owner's capital. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Record entry Clear entry View general journal Journal entry worksheet Record the close withdrawals to owner's capital. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Record entry Clear entry View general journal GENERAL LEDGER Cash Accounts Receivable Debit Date Debit Credit Date Credit Balance 50,247 Balance 4,725 Apr. 30 Apr. 30 Merchandise Inventory Debit Office Supplies Debit Date Credit Date Credit Balance 220,080 Balance 430 Apr. 30 Apr. 30 Store Supplies Debit Prepaid Insurance Debit Date Credit Balance Date Credit Balance 3,318 Apr. 30 2,447 Apr. 30 Office Equipment Debit Accumulated Depreciation Office Equipment Date Debit Credit Date Credit Balance 22,470 Balance 9,898 Apr. 30 Apr. 30 Store Equipment Debit Accumulated Depreciation-Store Equipment Date Debit Credit Date Credit Balance 38,920 Apr. 30 Balance 17,556 Apr. 30 Accounts Payable Debit Jenny Colo, Capital Debit Date Credit Date Credit Balance 7,098 Apr. 30 Balance 308,085 Apr. 30 Jenny Colo, Withdrawals Debit Credit Sales Debit Date Balance Date Credit Balance Sales Returns and Allowances Debit Credit Sales Discounts Debit Date Balance Date Credit Balance Cost of Goods Sold Debit Depreciation Expense-Office Equipment Debit Credit Date Credit Balance Date Balance Depreciation Expense-Store Equipment Debit Credit Office Salaries Expense Debit Date Balance Date Credit Balance Sales Salaries Expense Debit Insurance Expense Debit Date Credit Balance Date Credit Balance Rent Expense, Office Space Debit Credit Rent Expense, Selling Space Debit Credit Date Balance Date Balance Rent Expense, Office Space Debit Credit Rent Expense, Selling Space Debit Credit Date Balance Date Balance Office Supplies Expense Debit Credit Store Supplies Expense Debit Credit Date Balance Date Balance Utilities Expense Debit Income Summary Debit Date Credit Balance Date Credit Balance ACCOUNTS RECEIVABLE LEDGER Crane Corp. Debit Credit Hensel Company Debit Date Balance Date Credit Balance Knox, Inc. , Debit Lee Services Debit Date Credit Balance Date Credit Balance ACCOUNTS PAYABLE LEDGER Fink Corp. Debit Credit Garcia, Inc. Debit Date Balance Date Credit Balance Gear Supply Co. Debit Peyton Products Debit Date Credit Balance Date Credit Balance