Comprehensive Problem 2 May for the May 11,000 15 Parting 20 Paddy Recenbe n cins 21 Cam p 110.000 The 21. Redachfrom Geet 21. Purchased endise on account Omance Refund mechanin ia dedo made for the commerchand de m e for 5.000 p te . The cost of the on Tue Com 30 Red cash from so u thed on May 21 31. Poruchy Instructions 1. Enter the balances of each of the cours in the propri e column of four.com account. Write Raw in the section, and place a check mark in the Posting Refer ence column. i e the transactions for July, starting on Page 20 of the mall balance shelposting pled th e top or post to the receive and accounts payable sur le 3. Prepare an d trial balance & A n d of May, the data were and Analyse and use the A nventory on May 1 trance expired during the year Store supplies on and on May Officeries The adjustment for customers 535.000 forces of good old 6.600 11600 was is 560.for sales and and 5. Oplona) Enter the unadjusted trial balance on a 10-commend of period spreadsheet (worksheet, and complete the spreadsheet 6. Journaline and post the adjusting entries. Record the adjusting entries on Page 22 of the journal 7. Prepare ad usted til balance 8. Prepare an income tatement, and caring statement, and a balance sheet 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal Indicate dosed accounts by inserting a line in both the Balance columns opposite the clos ing entry. Insert the balance in the r ed caring account 10. Prepare a post-dosing trial balance Comprehensive Problem 2 8. Net income: Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The ac- $741,855 count balances for Palisade Creek as of May 1, 2018 (unless otherwise indicated), are as follows: 110 Cash $ 83,600 312 Dividends $ 135,000 112 Accounts Receivable 233,900 313 Income Summary 115 Inventory 624,400 410 Sales 5,069,000 116 Estimated Returns Inventory 28,000 510 Cost of Goods Sold 2.823.000 117 Prepaid Insurance 16,800 520 Sales Salaries Expense 664,800 118 Store Supplies 11,400 521 Advertising Expense 281,000 123 Store Equipment 569,500 522 Depreciation Expense 124 Accumulated Depreciation- 523 Store Supplies Expense Store Equipment 56,700 529 Miscellaneous Selling Expense 12,600 210 Accounts Payable 96,600 530 Office Salaries Expense 382,100 211 Salaries Payable 531 Rent Expense 83.700 212 Customers Refunds Payable 50,000 532 Insurance Expense 310 Common Stock 100,000 539 Miscellaneous Administrative 311 Retained Earnings 585,300 Expense 7,800 During May, the last month of the fiscal year, the following transactions were completed: May 1. Paid rent for May, 55,000 3. Purchased merchandise on account from Martin Co, terms 2/10,n/30, FOB shipping point, $36,000 Chapter 5 Accounting for Merchandising Businesses 281 May Paldreight on purchase of May 1 5600 6 Sold merchandise on account to Roman Co, terms 2/10,30, FOB shipping point. 568.500. The cost of the goods sold was 541.000 7. Received 522.300 cash from Halstad Co. on account 10. Sold merchandise for cash, 554.000. The cost of the goods sold was $12.000 13. Paid for merchandise purchased on May 3 15. Paid 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. Pald $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 58.000 Record the following transactions on Page 21 of the journal May 20 Sold merchandise on account to Crescent Co, terms 1/10, 1/30, FOB shipping point $110,000. The cost of the goods sold was $70,000 21. For the convenience of Crescent Co. paid freight on sale of May 20, 52,300. 21. Received $42.900 cash from Gee Co. on account. 21. Purchased merchandise on account from Osterman Co, terms 1/10, 1/30, FOB destination, 588.000 24. Returned of damaged merchandise purchased on May 21. receiving a credit memo from the seller for 55.000 26. Refunded cash on sales made for cash, 57.500. The cost of the merchandise returned was $4.800 28. Pald sales salaries of $56,000 and office salaries of $29,000. 29. Purchased store supplies for cash 52.400 30. Sold merchandise on account to Tumer Co, terms 2/10, 30, FOB shipping point. 578.750. The cost of the goods sold was 547,000. 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 Elence in the item section, and place a check mark() in the Posting Refer ence column. Journalize the transactions for July, starting on Page 20 of the journal 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). A Inventory on May 31 5570.000 12.000 B Insurance expired during the year C Store supplies on hand on May 31 D Depreciation for the current year E Accrued salaries on May 31: 57.000 Sales salaries Office salaries 6,600 13,600 F. The adjustment for customer returns and allowances is 560,000 for sales and 535,000 for cost of goods sold. 5. (Optional) Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalire and post the adjusting entries. Record the adjusting entries on Page 22 of the journal 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a retained earnings statement, 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 the Balance columns opposite the clos- ing entry. Insert the new balance in the retained earnings account 10. Prepare a post-closing trial balance