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Comprehensive Problem 2 Part 1 and Part 2: Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for

Comprehensive Problem 2 Part 1 and Part 2:

Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 2018, are as follows. Assume all accounts have normal balances.

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 Store Equipment 56,700 523 Store Supplies Expense
210 Accounts Payable 96,600 529 Miscellaneous Selling Expense 12,600
211 Salaries Payable 530 Office Salaries Expense 382,100
212 Customers Refunds Payable 50,000 531 Rent Expense 83,700
310 Common Stock 100,000 532 Insurance Expense
311 Retained Earnings 585,300 539 Miscellaneous Administrative Expense 7,800

Part 1: Journalize the transactions below for May, the last month of the fiscal year. For a compound transaction, if an amount box does not require an entry, leave it blank.

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.

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

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.

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Comprehensive Problem 2 Part 4 and 6:

Note: You must complete parts 1, 2 and 3 before attempting to complete part 4 and part 6. Part 5 is an optional work sheet.

4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete Part 6.

a. Inventory on May 31 $570,000
b. Insurance expired during the year 12,000
c. Store supplies on hand on May 31 4,000
d. Depreciation for the current year 14,000
e. Accrued salaries on May 31:
Sales salaries $7,000
Office salaries 6,600 13,600

f. The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold.

6. Journalize the adjusting entries. For a compound transaction, if an amount box does not require an entry, leave it blank. Post the adjusting entries to the attached spreadsheet you used in parts 1 and 2.

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Comprehensive Problem 2 Part 5: Optional work sheet

Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet using the following adjustment data.

a. Inventory on May 31 $570,000
b. Insurance expired during the year 12,000
c. Store supplies on hand on May 31 4,000
d. Depreciation for the current year 14,000
e. Accrued salaries on May 31:
Sales salaries $7,000
Office salaries 6,600 13,600

f. The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold.

If an amount box does not require an entry, leave it blank.

image text in transcribed

image text in transcribed

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, 2018 Debit Credit Cash Accounts Recelvable Inventory Estimated Returns Inventory Prepaid Insurance Store Supplies Store Equipment Accumulated Depreciation-Store Equipment Accounts Payable Salaries Payable 84,500 223,900

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