May 29: Purchased store supplies for cash, $2,400. Post. Description Debit Ref. Credit Store Supplies 2,400 Cash 2,400 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. Post Description Debit Credit Ref. Accounts Receivable-Turner Co. 77,17 Sales 77,17 Cost of Merchandise Sold 47,00 Merchandise Inventory 47,00 May 30: Received cash from sale of May 20 plus freight paid on May 21. Post. Description Debit Credit Ref. Cash 111,2 Accounts Receivable-Crescent Co. 111,2 May 31: Paid for purchase of May 21, less return of May 24. Post. Description Debit Credit Ref. Accounts Payable-Osterman Co. 82,171 Cash 82,171 May 16: Received cash from sale of May 6. Post. Description Ref. Debit Credit Cash 67,13 Accounts Receivable-Korman Co. 67,13 67,13 May 19: Purchased merchandise for cash, $18,700. Post. Description Debit Credit Ref. Merchandise Inventory v 18,70 Cash 18,70 Credit May 19: Paid $33,450 to Buttons Co. on account. Post. Description Debit Ref. Accounts Payable-Buttons Co. 33,45 Cash 33,45 May 20: Paid Korman Co. a cash refund of $5,000 for damaged merchandise from sale of May 6. Korman Co. kept the merchandise. Post. Description Debit Credit Ref. Customer Refund Payable v 5,000 Cash 5,000 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. Post. Description Ref. Debit Credit Accounts Receivable-Crescent Co. 108,9 108,9 v Sales Cost of Merchandise Sold Merchandise Inventory 70,00 70,00 May 21: For the convenience of Crescent Co., paid freight on sale of May 20, $2,300. Post. Description Debit Credit Ref. Accounts Receivable-Crescent Co. 2,300 Cash 2,300 May 21: Received $42,900 cash from Gee Co. on account. Post. Description Debit Credit Ref. Cash 42,901 Accounts Receivable-Gee Co. 42,901 Accounting numeric field May 21: Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000. Post. Description Debit Credit Ref. Merchandise Inventory 87,121 Accounts Payable-Osterman Co. 87,12 May 24: Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. Post. Description Debit Ref. Credit Accounts Payable-Osterman Co. 4,950 Merchandise Inventory 4,950 May 26: Refunded cash on sales made for cash, $800. The defective merchandise was not returned by the customer. Description Post. Debit Credit Ref. Customer Refund Payable 800 Cash 800 May 28: Paid sales salaries of $56,000 and office salaries of $29,000. Post. Description Debit Credit Ref. Sales Salaries Expense v 56,001 Office Salaries Expense 29,00 Cash 85,00 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, 2017 (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, 2046 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: Using the attached spreadsheet, 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. If an amount box does not require an entry, leave it blank. May 1: Paid rent for May, $5,000. Post Description Debit Credit Ref. Rent Expense 5,000 Cash ) May 3: Purchased merchandise on account from Martin Co., terms 2/10, 1/30, FOB shipping point, $36,000. Post Description Debit Credit Ref. Merchandise Inventory 35,28 Accounts Payable-Martin Co. 35,28 Credit May 4: Paid freight on purchase of May 3, $600. Description Post Debit Ref Merchandise Inventory 600 Cash May 6: Sold merchandise account to Korman Co., terms 2/10, 1/30, FOB shipping point, $68,500. The cost of the merchandise sold was $11,000. Description Post. Debit Credit Ref. Accounts Receivable-Korman Cov 67,13 67,13 Cost of Merchandise Sold 41,00 Merchandise Inventory 41,00 Sales May 7: Received $22,300 cash from Halstad Co. on account Description Post Ref. Debit Credit Cash 22,30 Accounts Receivable-Halstad Co. 22.30 chandise e cost of the handise sold was $32,000. cash, Post Ref Description Debit Credit 54,00 54,00 Cash Sales Cost of Merchandise Sold Merchandise Inventory 32,00 32,00 May 13: Paid for merchandise purchased on May 3. Post. Description Debit Ref. Accounts Payable-Martin Co. 35,28 Credit Cash 35,28 May 15: Paid advertising expense for last half of May, $11,000. Post. Description Debit Credit Ref. Advertising Expense v 11,00 Cash 11,00 Comprehensive Problem 2 Part 9: You must complete parts 1, 2, 3, 4, 6, 7 and 8 before attempting to complete part 9. Part 5 is optional. Journalize the closing entries. Then post the journal to the general ledger you created in part 1. Indicate closed accounts by inserting a line in both the balance columns opposite the closing entry. Insert the new balance in the owner's capital account. If an amount box does not require an entry, leave it blank. Page 23 Date Description Post. Ref. Debit Credit Closing Entries 20Y7 May 31 May 31 3. Prepare a balance sheet. Palisade Creek Co. Balance Sheet May 31, 2017 Assets Current assets: Total current assets Property, plant, and equipment: Total property, plant, and equipment Total assets Liabilities Current liabilities: Total liabilities Owner's equity Total liabilities and owner's equity 1. Prepare an income statement. Palisade Creek Co. Income Statement For the Year Ended May 31, 2047 Sales 5,316, 205 Cost of merchandise sold 2,991,950 Gross profit 2,324,255