Comprehensive Problem

Part $1$ and Part $2$:

Palisade Creek Co$.$ is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co$.$ as of May $1,20$Y$7($unless otherwise indicated$),$ are as follows:

$110$

Cash

$$83,600$

$112$

Accounts Receivable

$233,900$

$115$

Merchandise Inventory

$652,400$

$117$

Prepaid Insurance

$16,800$

$118$

Store Supplies

$11,400$

$123$

Store Equipment

$569,500$

$124$

Accumulated Depreciation$$Store Equipment

$56,700$

$210$

Accounts Payable

$96,600$

$211$

Customer Refunds Payable

$50,000$

$212$

Salaries Payable

$$

$310$

Lynn Tolley, Capital, June $1,20$Y$6$

$685,300$

$311$

Lynn Tolley, Drawing

$135,000$

$410$

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 $1$: Journalize the transactions for May, the last month of the fiscal year, below.

Part $2$: Using the attached spreadsheet as your general ledger, post the journal entries you created in Part $1$ 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. Please be sure to save the spreadsheet general ledger to use for the remaining parts of this comprehensive problem.

Part $3$: Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank.

Part $4$ and $6$:

$4.$ 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 $2.$

Part $5$: 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$.$

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.$

Palisade Creek Co$.$

End$-$of$-$Period Spreadsheet $($Work Sheet$)$

For the Year Ended May $31,20$Y$7$ Unadjusted Trial

Part $7$:

You must complete parts $1,2,3,4,5$ and $6$ before completing

part $7-$

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

Part $8$:

$1-$ prepare an income statement

$2-$ Prepare a statement of owner's equity.

$3.$ Prepare a balance sheet.

Part $9$:

Journalize the closing entries.

Part $10$:

Prepare a post$-$closing trial balance