Comprehensive Problem 2 Part 1 and Part 2 Palisade Creek Co is a merchandising business The account balances for Palisade Creek Co as of May 1, 2016 (unless otherwise indicated), are as follows 110 Cash $83,600 112 Accounts Receivable 233,900 115 Merchandise Inventory 624,400 116 Estimated Returns Inventory 28,000 117 Prepaid Insurance 16,800 118 Store Supplies 11,400 123 Store Equipment 569,500 124 Accumulated DepreciationStore Equipment 56,700 210 Accounts Payable 96,600 211 Salaries Payable 212 Customers Refunds Payable 50,000 310 Lynn Tolley, Capital, June 1, 2015 685,300 311 Lynn Tolley, Drawing 135,000 312 Income Summary 410 Sales 5,069,000 510 Cost of Merchandise Sold 2,823,000 520 Sales Salaries Expense 664,800 521 Advertising Expense 281,000 522 Depreciation Expense 523 Store Supplies Expense 529 Miscellaneous Selling Expense 12,600 530 Office Salaries Expense 382,100 531 Rent Expense 83,700 532 Insurance Expense 539 Miscellaneous Administrative Expense 7,800 Part 1 Using the attached spreadsheet, enter the balances of each of the accounts in the appropriate balance column of a four column account Write Balance in the item section, and place a check mark () in the Posting Reference column Journalize the transactions for May, the last month of the fiscal year, below Part 2 Post the journal to the general ledger you created in Part 1, 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 For a compound transaction, if an amount box does not require an entry, leave it blank or enter 0 May 1 Paid rent for May, $5,000 Description Post Ref Debit Credit Rent Expense Cash May 3 Purchased merchandise on account from Martin Co , terms 2 10, n 30, FOB shipping point, $36,000 Description Post Ref Debit Credit May 4 Paid freight on purchase of May 3, $600 Description Post Ref Debit Credit May 6 Sold merchandise on account to Korman Co , terms 2 10, n 30, FOB shipping point, $68,500 The cost of the merchandise sold was $41,000 Description Post Ref Debit Credit May 7 Received $22,300 cash from Halstad Co on account Description Post Ref Debit Credit May 10 Sold merchandise for cash, $54,000 The cost of the merchandise sold was $32,000 Description Post Ref Debit Credit May 13 Paid for merchandise purchased on May 3 Description Post Ref Debit Credit May 15 Paid advertising expense for last half of May, $11,000 Description Post Ref Debit Credit May 16 Received cash from sale of May 6 Description Post Ref Debit Credit May 19 Purchased merchandise for cash, $18,700 Description Post Ref Debit Credit May 19 Paid $33,450 to Buttons Co on account Description Post Ref Debit Credit May 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 Description Post Ref Debit Credit May 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 Description Post Ref Debit Credit May 21 For the convenience of Crescent Co , paid freight on sale of May 20, $2,300 Description Post Ref Debit Credit May 21 Received $42,900 cash from Gee Co on account Description Post Ref Debit Credit May 21 Purchased merchandise on account from Osterman Co , terms 1 10, n 30, FOB destination, $88,000 Description Post Ref Debit Credit May 24 Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000 Description Post Ref Debit Credit May 26 Refunded cash on sales made for cash, $7,500 The cost of the merchandise returned was $4,800 Description Post Ref Debit Credit May 28 Paid sales salaries of $56,000 and office salaries of $29,000 Description Post Ref Debit Credit May 29 Purchased store supplies for cash, $2,400 Description Post Ref Debit Credit May 30 Sold merchandise on account to Turner Co , terms 2 10, n 30, FOB shipping point, $78,750 The cost of the merchandise sold was $47,000 Description Post Ref Debit Credit May 30 Received cash from sale of May 20 plus freight paid on May 21 Description Post Ref Debit Credit May 31 Paid for purchase of May 21, less return of May 24 Description Post Ref Debit Credit 2 Comprehensive Problem 2 Part 3 NOTE You must complete parts 1 and 2 before completing part 3 Prepare an unadjusted trial balance If an amount box does not require an entry, leave it blank Palisade Creek Co Unadjusted Trial Balance May 31, 2016 Debit Credit Cash Accounts Receivable Merchandise Inventory Estimated Returns Inventory Prepaid Insurance Store Supplies Store Equipment Accumulated DepreciationStore Equipment Accounts Payable Salaries Payable Customers Refunds 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

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Comprehensive Problem 2 Part 1 and Part 2: Palisade Creek Co. is a merchandising business. The account balances for Palisade Creek Co. as of May

Comprehensive Problem 2 Part 1 and Part 2:

Palisade Creek Co. is a merchandising business. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows:

110	Cash	$83,600
112	Accounts Receivable	233,900
115	Merchandise Inventory	624,400
116	Estimated Returns Inventory	28,000
117	Prepaid Insurance	16,800
118	Store Supplies	11,400
123	Store Equipment	569,500
124	Accumulated DepreciationStore Equipment	56,700
210	Accounts Payable	96,600
211	Salaries Payable
212	Customers Refunds Payable	50,000
310	Lynn Tolley, Capital, June 1, 2015	685,300
311	Lynn Tolley, Drawing	135,000
312	Income Summary
410	Sales	5,069,000
510	Cost of Merchandise Sold	2,823,000
520	Sales Salaries Expense	664,800
521	Advertising Expense	281,000
522	Depreciation Expense
523	Store Supplies Expense
529	Miscellaneous Selling Expense	12,600
530	Office Salaries Expense	382,100
531	Rent Expense	83,700
532	Insurance Expense
539	Miscellaneous Administrative Expense	7,800

Part 1: Using the attached spreadsheet, enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark () in the Posting Reference column. Journalize the transactions for May, the last month of the fiscal year, below.

Part 2: Post the journal to the general ledger you created in Part 1, 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.

For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".

May 1: Paid rent for May, $5,000.

Description	Post. Ref.	Debit	Credit
Rent Expense
Cash

May 3: Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.

Description	Post. Ref.	Debit	Credit

May 4: Paid freight on purchase of May 3, $600.

Description	Post. Ref.	Debit	Credit

May 6: Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the merchandise sold was $41,000.

Description	Post. Ref.	Debit	Credit

May 7: Received $22,300 cash from Halstad Co. on account.

Description	Post. Ref.	Debit	Credit

May 10: Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.

Description	Post. Ref.	Debit	Credit

May 13: Paid for merchandise purchased on May 3.

Description	Post. Ref.	Debit	Credit

May 15: Paid advertising expense for last half of May, $11,000.

Description	Post. Ref.	Debit	Credit

May 16: Received cash from sale of May 6.

Description	Post. Ref.	Debit	Credit

May 19: Purchased merchandise for cash, $18,700.

Description	Post. Ref.	Debit	Credit

May 19: Paid $33,450 to Buttons Co. on account.

Description	Post. Ref.	Debit	Credit

May 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.

Description	Post. Ref.	Debit	Credit

May 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.

Description	Post. Ref.	Debit	Credit

May 21: For the convenience of Crescent Co., paid freight on sale of May 20, $2,300.

Description	Post. Ref.	Debit	Credit

May 21: Received $42,900 cash from Gee Co. on account.

Description	Post. Ref.	Debit	Credit

May 21: Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.

Description	Post. Ref.	Debit	Credit

May 24: Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.

Description	Post. Ref.	Debit	Credit

May 26: Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800.

Description	Post. Ref.	Debit	Credit

May 28: Paid sales salaries of $56,000 and office salaries of $29,000.

Description	Post. Ref.	Debit	Credit

May 29: Purchased store supplies for cash, $2,400.

Description	Post. Ref.	Debit	Credit

May 30: Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the merchandise sold was $47,000.

Description	Post. Ref.	Debit	Credit

May 30: Received cash from sale of May 20 plus freight paid on May 21.

Description	Post. Ref.	Debit	Credit

May 31: Paid for purchase of May 21, less return of May 24.

Description	Post. Ref.	Debit	Credit

Comprehensive Problem 2 Part 3:

NOTE: You must complete parts 1 and 2 before completing part 3.

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

Palisade Creek Co. Unadjusted Trial Balance May 31, 2016
	Debit	Credit
Cash
Accounts Receivable
Merchandise Inventory
Estimated Returns Inventory
Prepaid Insurance
Store Supplies
Store Equipment
Accumulated DepreciationStore Equipment
Accounts Payable
Salaries Payable
Customers Refunds 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