Comprehensive Problem 2

Part 1,2, and 3

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.	Merchandise inventory on May 31			$585,200
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 refunds and allowances is $60,000.

6. Journalize the adjusting entries. 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.

				Page 22
Date	Description	Post. Ref.	Debit	Credit
	Adjusting Entries
20Y7
May 31	Cost of Merchandise Sold		fill in the blank 2	fill in the blank 3
	Merchandise Inventory		fill in the blank 5	fill in the blank 6
May 31	Insurance Expense		fill in the blank 8	fill in the blank 9
	Prepaid Insurance		fill in the blank 11	fill in the blank 12
May 31	Store Supplies Expense		fill in the blank 14	fill in the blank 15
	Store Supplies		fill in the blank 17	fill in the blank 18
May 31	Depreciation Expense		fill in the blank 20	fill in the blank 21
	Accumulated Depreciation-Store Equipment		fill in the blank 23	fill in the blank 24
May 31	Sales Salaries Expense		fill in the blank 26	fill in the blank 27
	Office Salaries Expense		fill in the blank 29	fill in the blank 30
	Salaries Payable		fill in the blank 32	fill in the blank 33
May 31	Sales		fill in the blank 35	fill in the blank 36
	Accounts Payable		fill in the blank 38	fill in the blank 39

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, 2017 Debit Balances Credit Balances Cash 99,430 v Accounts Receivable 245,875 Merchandise Inventory 599,150 Prepaid Insurance 16,800 Store Supplies 13,800 Store Equipment 569,500 Accumulated Depreciation-Store Equipment 56,700 Accounts Payable 63,150 Customer Refunds Payable 44,200 Salaries Payable Lynn Tolley, Capital 685,300 Check My Work Customer Refunds Payable 44,200 Salaries Payable Lynn Tolley, Capital 685,300 Lynn Tolley, Drawing 135,000 Sales 5,376,205 Cost of Merchandise Sold 3,013,000 Sales Salaries Expense 720,800 Advertising Expense 292,000 Depreciation Expense Store Supplies Expense 12,600 Miscellaneous Selling Expense 411,100 Office Salaries Expense 88,700 Rent Expense Insurance Expense 7,800 Miscellaneous Administrative Expense 6,225,555 6,225,555 Check My Work All work saved. 62 OL 34,587