Comprehensive Problem 2 Part 1 and Part 2: Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 2016 (unless otherwise indicated), are as follows. Assume all accounts have normal balances. 110 Cash $83,600 312 Dividends $135,000 112 Accounts Receivable 233,900 410 Sales 5,069,000 115 Inventory 624,400 510 Cost of Goods Sold 2,823,000 116 Estimated Returns Inventory 28,000 520 Sales Salaries Expense 664,800 117 Prepaid Insurance 16,800 521 Advertising Expense 281,000 118 Store Supplies 11,400 522 Depreciation Expense 123 Store Equipment 569,500 523 Store Supplies Expense 124 Accumulated Depreciation-Store Equipment 56,700 529 Miscellaneous Selling Expense 12,600 210 Accounts Payable 96,600 530 Office Salaries Expense 392,100 211 Salaries Payable 531 Rent Expense 83,700 212 Customers Refunds Payable 50,000 532 Insurance Expense 310 Common Stock 100,000 539 Miscellaneous Administrative Expense 7,800 311 Retained Earnings 585,300 539 Part 1: Journalize the transactions below for May, the last month of the fiscal year. If an amount box does not require an entry, leave it blank. May 1: Paid rent for May, $5,000. Date Description Post. Ref. Credit Debit 5,000 May 1 Rent Expense Cash 5,000 May 3: Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000. Date Description Post. Ref. Debit Credit May 3 Inventory 35,280 Accounts Payable-Martin Co. 35,280 May 4: Paid freight on purchase of May 3, $600. Date Description Post. Ref. Debit May 4 Inventory 600 Credit Cash 600 May 6: Sold merchandise on account to Korman Co., terms 2/10, 1/30, FOB shipping point, $68,500. The cost of the goods sold was $41,000. Post. Date Description Debit Credit Ref. May 6-Sales Accounts Receivable-Korman Co. 67,130 Check My Work Omore Check My Work uses remaining May 6: Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point $68,500. The cost of the goods sold was $41,000. Date Description Post. Ref. Debit Credit 67,130 67,130 May 6-Sales Accounts Receivable-Korman Co. V Sales May 6-Cost Cost of Goods Sold Inventory 41,000 41,000 May 7: Received $22,300 cash from Halstad Co. on account. Date Description Post. Ref. Debit Credit May 7 Cash 22,300 Accounts Receivable-Halstad Co. 22,300 Date May 10: Sold merchandise for cash, $54,000. The cost of the goods sold was $32,000. Post. Description Debit Credit Ref. May 10-Sales Cash 54,000 Sales 54,000 May 10-Cost Cost of Goods Sold 32,000 Inventory 32,000 May 13: Paid for merchandise purchased on May 3. Date Description Post. Ref. Debit Credit 35,280 May 13 Accounts Payable-Martin Co. V Cash 35,280 May 15: Paid advertising expense for last half of May, $11,000. Date Description Post. Ref. Debit Credit May 15 Advertising Expense 11,000 Cash 11,000 May 16: Received cash from sale of May 6. Date Description Post. Ref. Debit Credit May 16 Cash 67,130 Accounts Receivable-Korman Co. 67,130 May 19: Purchased merchandise for cash, $18,700. Date Description Post. Ref. Debit Credit May 19 Inventory 18,700 Cash 18,700 May 19: Paid $33,450 to Buttons Co. on account. Post. Date Description Ref. Debit Credit May 19 Accounts Payable-Buttons Co. 33,450 Cash 33,450 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. Post. Date Description Debit Credit Ref. May 20-Refund Customers Refunds Payable 13,230 Cash 13,230 8,000 May 20-Cost Inventory Estimated Returns Inventory 8,000 May 20: Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the goods sold was $70,000. Date Description Post. Ref. Debit Credit May 20-Sales Accounts Receivable-Crescent Co. 108,900 Sales 108,900 May 20-Cost Cost of Goods Sold 70,000 Inventory 70,000 May 21: For the convenience of Crescent Co. paid freight on sale of May 20, $2,300. Post. Date Description Debit Credit Ref. May 21 Accounts Receivable-Crescent Co. 2,300 Cash 2,300 Credit May 21: Received $42,900 cash from Gee Co. on account. Post. Date Description Debit Ref. May 21 Cash 42,900 Accounts Receivable-Gee Co. 42,900 May 21: Purchased merchandise on account from Osterman Co., terms 1/10, 1/30, FOB destination, $88,000. Date Post. Ref. Debit Credit Description May 21 Inventory Accounts Payable-Osterman Co. V 87,120 87,120 May 24: Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. Date Description Post. Ref. Debit Credit 4,950 May 24 Accounts Payable-Osterman Co. V Inventory 4,950 May 26: Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800. Post. Date Description Debit Credit Ref. May 26-Refund Customers Refunds Payable 7,500 Cash 7,500 May 26-Cost 4,800 Inventory Estimated Returns Inventory 4,800 May 28: Paid sales salaries of $55,000 and office salaries of $29,000. Post. Date Description Credit Ref. May 28 Sales Salaries Expense 56,000 Debit Office Salaries Expense 29,000 Cash 85,000 Credit May 29: Purchased store supplies for cash, $2,400. Date Description Post. Ref. Debit May 29 Store Supplies 2,400 Cash 2,400 May 30: Sold merchandise on account to Turner Co., terms 2/10, 1/30, FOB shipping point, $78,750. The cost of the goods sold was $47,000. Date Description Post. Ref. Debit Credit May 30-Sales Accounts Receivable-Turner Co. 77,175 Sales 77,175 May 30-Cost Cost of Goods Sold 47,000 Inventory 47,000 May 30: Received cash from sale of May 20 plus freight paid on May 21. Date Description Post. Ref. Debit Credit May 30 Cash 111,200 Accounts Receivable-Crescent Co. - 111,200 May 31: Paid for purchase of May 21, less return of May 24. Date Description Post. Ref. Debit Credit May 31 Accounts Payable-Osterman Co. 82,170 Cash 82,170 Part 2: Using the attached spreadsheet, post the journal entries from Part 1 to the general ledger. Extend 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. COMPREHENSIVE PROBLEM 2 520 Sales Salaries Expense Post Date Item Ref. Balance Dr. Cr. Dr. Cr. The following ledger accounts appear below, in this order: Sales, Cost of Goods Sold, Sales Salaries Expense, Advertising Expense, Depreciation Expense, Store Supplies Expense, Miscellaneous Selling Expense, Office Salaries Expense, Rent Expense, Insurance Expense, Miscellaneous Administrative Expense The remaining accounts are found on the previous page. The entries in the ledgers will not grade or mark correct or incorrect. 5/1 Balance V 664,800 LEDGERS - Income Statement accounts Sales 410 Post Balance Date Item Ref Dr. Cr. Dr. Cr. 521 Advertising Expense Post Date Item Ref. Balance 5/1 Balance V 5,069,000 Dr. Cr Dr. Cr. 5/1 Balance V 281,000 522 Depreciation Expense Post Date Item Ref. Balance Cost of Goods Sold 510 Dr. Cr. Dr. Cr. Balance Post Ref. Date Item Dr Cr. Dr. Cr. 5/1 Balance V 2,823,000 523 Stores Supplies Expense Post Date Item Ref. Balance Dr. Cr. Dr. Cr. 529 Miscellaneous Selling Expense Post Dat Item Ref. Dr. Balance Cr. Dr. Cr. 5/4 Balanc 530 Office Salaries Expense Post Dat ltem Ref. Balance Dr. Cr. Dr. Cr. 5/ Balanc 531 Rent Expense Post Dat Item Ref. Balance Dr. Dr. Cr. 5/ Balanc 532 Insurance Expense Post Dat Item Ref. Balance Dr. Dr. Cr. 539 Miscellaneous Administrative Expense Post Dat Item Ref. Dr. Balance Cr. Dr. Cr. 5/4 Balanc