MERCHANDISING ACOUNTING Joe Blink and his brother Paul opened Blink's Partnership Company Merchandising business on July 1. The company applies the perpetual inventory system. July 1 Joe and Paul each invest $90,000 cash in a new partnership Purchased merchandise form Boden Company for $7,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. Purchased cleaning supplies for $2,100 on account. Purchased used truck from Carter for 59,000, paying $3.000 cash and the balance On account. Sold merchandise that cost $4,500 to Rivera's Co. for $9.900 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated July 2, subject to a 9sales tax. Received $9,954 in advance for merchandise to take place on July 12. Blink's asked Carter, Co. to accept a 60-day, 15% note to replace its existing account payable to Carter. Paid $225 cash for freight charges on the purchase of July 1 Paid $3,800 cash on one-year Insurance policy effective July 1. Blink's issued a $350,000, 4-year, 12% note at face value to Forest Hills Bank and received $350,000 cash. The note requires annual interest payments each December 31. Bink's pays the note plus interest to Carter. (July 3) Blink's borrows $95.000 from American Bank. The note bears interest at 9% per year. Principal and interest are due in 30 days. Sold merchandise that cost $700 to customers for $1,900 cash, FOB shipping point. Invoice dated July 8, subject to a 9% sales tax. Sold merchandise that cost $7,900 to Rivera's Co. for $9.900 cash received on July 2 Invoice dated July12, subject to a 9% sales tax. Hill Park Corp was started on March 1 by Papo and Carmen Castro. During March, the following events and transactions were completed. Mar. 1 Issued 300,000 shares of $2 par value common stock for $450,000 cash 1 Hire a secretary at a salary of $2,900 per month Purchase land costing $55,000 for cash. 3 Purchased used truck for $9,000, paying $3,000 cash and the balance on account. Purchased cleaning supplies for $4,100 on account. Incurred advertising expense of $2,100 on account. 15 30 5 Paid $2,800 cash on one-year insurance policy effective March 1. 14 Receive $7,200 cash for admission fees. Hire a park manager at a salary of $1,800 per month, effective April 1. 18 Paid $1,700 cash on amount owed on truck 19 Declared and paid $1,950 cash dividend. 20 Paid $4,800 cash for employee salaries. 21 Billed customers $2,500 for admission fees 22 Receive $8,200 cash for admission fees. 28 Paid gas and oil for month on truck $700 Sold 200 coupon books for $40 each. Each book contains six coupon that entitle the holder to one admission to the park. 31 Paid $2,100 on account for advertising incurred on March 5. 31 Collected $1,400 cash from customers billed on March 21.. The chart of accounts for Hill Park Corp contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 157.1 Accumulated Depreciation - Equipment, No. 158 Land, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 213 Unearned admission, No. 301 Common Stock, No. 302 Paid in Capital in Excess No. 305 Retained Earnings, No. 306 Dividend, No. 350 Income Summary, No. 400 Admission Revenue, No. 533 Gas & Oil Expense, No. 534 Cleaning Supplies Expense, No. 611 Depreciation Expense, No. 622 Insurance Expense, No. 626 Salaries Expense, No. 627 Advertising Expense. Instructions: a) Journalize and post the March transactions. Use page J-1 for the journal b) Enter the following adjustments on the general journal. 1) Depreciation on equipment for the month was $250. 2) One-twelfth of the insurance expired. 3) An inventory count shows $600 of cleaning supplies on hand at March 31. 4) Accrued but unpaid employee salaries were $3,500. c) Prepare the income statement for March and a classified balance sheet at March 31. d) Journalize and post adjustment entries. e) Journalize and post closing entries and complete the closing process. 1) Prepare a post-closing trial balance at March