Chapter 6 Accounting for Merchandning Businesses317 Continuing Problem Palisade Creek Co. is a The account bulances for Palisade Creck Co as of May 1, 2016 (unless otherwise are as follow merchandising business that uses tdhe pepetual invessory system indicabed) 110 Cash 112 Accounts Recevable 115 Merchande Inventory 116 Estimated Returns Invemory s 83,600 624.400 16.800 17 Prepaid insurance 18 Store Supplies 123 S1ore Equipment 96,700 96,600 210 Accounts Payable 211 Salaries Payable 212 Customers Refunds Payable 310 Lynn Telley, Capital, Jone 1,2015 50.000 685,300 135,000 11 Lynn Tolley, Drawing 312 Icome Summary 10 Sales 10 Cost of Merchandise Seld 520 Sales Salaries Expense 521 Advertising Expense 5069,000 2823000 281.000 23 Store Supplies Expense 529 Miscellianeous Seling Expense 530 Office Salaries Expense 531 Rent Expense 12,600 82,100 83,700 32 Insurance Expense 39 Miscellaneous Administrative Expensa 7.800 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, n/30, FOB shipping point,$36.000 Paid freight on purchase of May 3, $600 6. Sold merchandise on account t n account to Korman Co, terms 2/1o, n/30, FOB shipping point, s68,500. The cost of the merchandise sold was $61,000 7. Received $22,300 cash from Halstad Co. on account. 10. Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000. 13. Paid for merchandise purchased on May 3 15. Pakd advertising expense for last 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 $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000, Record the follouing transactions on Page 21 of the journal 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 21. For the convenience of Crescent Co., paid freight on sale of May 20, $2.300. 21. Received $42,900 cash from Gee Co. on account (Continued)