Question
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. During May, the last month of the fiscal year, transactions were completed.
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. During May, the last month of the fiscal year, transactions were completed. In Part 1 of this problem, the accounting cycle was completed up through the preparation of the adjusted trial balance.
A . 1. Prepare the closing entries. Record the closing entries on Page 23 of the journal. Refer to the Chart of Accounts for the exact wording of account titles.
2. Post the closing entries to the ledger of four-column accounts. Add the appropriate posting reference to the journal. Insert the new balance in the retained earnings account.
3. Prepare a post-closing trial balance. Accounts with zero balances can be left blank.
Labels | |
Administrative expenses | |
Current assets | |
Current liabilities | |
For the Year Ended May 31, 2018 | |
Long-term liabilities | |
May 31, 2018 | |
Operating expenses | |
Property, plant, and equipment | |
Selling expenses | |
Amount Descriptions | |
Dividends | |
Cost of Goods Sold | |
Gross profit | |
Change in retained earnings | |
Net income | |
Net loss | |
Retained earnings, June 1, 2017 | |
Retained earnings, May 31, 2018 | |
Total administrative expenses | |
Total assets | |
Total current assets | |
Total liabilities | |
Total liabilities and stockholders equity | |
Total operating expenses | |
Total property, plant, and equipment | |
Total selling expenses | |
Total stockholders equity |
B. Post the closing entries to the ledger of four-column accounts. Insert the new balance in the retained earnings account.
Palisade Creek Co. ADJUSTED TRIAL BALANCE May 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 84,500.00 Accounts Receivable 245,875.00 Inventory 570,000.00 Estimated Returns Inventory 50,200.00 Prepaid Insurance 4,800.00 6 Store Supplies 4,000.00 Store Equipment 569,500.00 8 Accumulated Depreciation-Store Equipment 70,700.00 9 Accounts Payable 63,150.00 10 Salaries Payable 13,600.00 11 Customers Refunds Payable 89,270.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,316,205.00 16 Cost of Goods Sold 2,991,950.00 17 Sales Salaries Expense 727,800.00 18 Advertising Expense 292,000.00 19 Depreciation Expense 14,000.00 20 Store Supplies Expense 9,800.00 21 Miscellaneous Selling Expense 12,600.00 22 Office Salaries Expense 417,700.00 23 Rent Expense 88,700.00 24 Insurance Expense 12,000.00 25 Miscellaneous Administrative Expense 7,800.00 26 Totals 6,238,225.00 6,238,225.00 Palisade Creek Co. UNADJUSTED TRIAL BALANCE May 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 84,500.00 2 Accounts Receivable 245,875.00 3 Inventory 583,950.00 Estimated Returns Inventory 15,200.00 5 Prepaid Insurance 16,800.00 6 Store Supplies 13,800.00 7 Store Equipment 569,500.00 Accumulated Depreciation Store Equipment 56,700.00 9 Accounts Payable 63,150.00 10 Salaries Payable 11 Customers Refunds Payable 29,270.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,376,205.00 16 Cost of Goods Sold 3,013,000.00 17 Sales Salaries Expense 720,800.00 18 Advertising Expense 292,000.00 19 Depreciation Expense 20 Store Supplies Expense 21 Miscellaneous Selling Expense 12,600.00 22 Office Salaries Expense 411,100.00 23 Rent Expense 88,700.00 24 Insurance Expense 25 Miscellaneous Administrative Expense 7,800.00 26 Totals 6,210,625.00 6,210,625.00
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