Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2018, are as follows: Assume all accounts have normal balances.
| 110 | Cash | $ 83,600 |
| 112 | Accounts receivable | 233,900 |
| 115 | Inventory | 624,400 |
| 116 | Estimated returns inventory | 28,000 |
| 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 | Salaries payable | |
| 212 | Customers refunds payable | 50,000 |
| 310 | Common stock | 100,000 |
| 311 | Retained earnings | 585,300 |
| 312 | Dividends | 135,000 |
| 313 | Income summary | |
| 410 | Sales | 5,069,000 |
| 510 | Cost of goods 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 |
During May, the last month of the fiscal year, the following transactions were completed:
Record the following transactions on page 20 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
| May | 1 | Paid rent for May, $5,000. |
| | 3 | Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000. |
| | 4 | Paid freight on purchase of May 3, $600. |
| | 6 | Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the goods sold was $41,000. |
| | 7 | Received $22,300 cash from Halstad Co. on account. |
| | 10 | Sold merchandise for cash, $54,000. The cost of the goods sold was $32,000. |
| | 13 | Paid for merchandise purchased on May 3. |
| | 15 | Paid advertising expense for last half of May, $11,000. |
| | 16 | Received cash from sale of May 6. |
| | 19 | Purchased merchandise for cash, $18,700. |
| | 19 | Paid $33,450 to Buttons Co. on account. |
| | 20 | Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000. |
Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
| May | 20 | Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the goods sold was $70,000. |
| | 21 | For the convenience of Crescent Co., paid freight on sale of May 20, $2,300. |
| | 21 | Received $42,900 cash from Gee Co. on account. |
| | 21 | Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000. |
| | 24 | Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. |
| | 26 | Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800. |
| | 28 | Paid sales salaries of $56,000 and office salaries of $29,000. |
| | 29 | Purchased store supplies for cash, $2,400. |
| | 30 | Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the goods sold was $47,000. |
| | 30 | Received cash from sale of May 20 plus freight paid on May 21. |
| | 31 | Paid for purchase of May 21, less return of May 24. |
| | Required: |
| 1. | Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the May transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem. | A. | Enter the May 1 balances of each of the accounts in the appropriate balance column of a four-column account. Enter May 1 in the date column. Write Balance in the item section, and enter X in the Posting Reference column. | | B. | Journalize the transactions for May, starting on Page 20 of the journal.* | |
| 2. | Post the journal 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. |
| 3. | Prepare an unadjusted trial balance. Accounts with zero balances can be left blank. |
| 4. | At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). | A. | Inventory on May 31, $570,000 | | 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 | | Total accrued salaries: $13,600 | | | | F. | The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold. | |
| 5. | (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. |
| 6. | | A. | Journalize the adjusting entries. Record the adjusting entries on Page 22 of the journal.* | | B. | Post the adjusting entries. | |
| 7. | Prepare an adjusted trial balance. Accounts with zero balances can be left blank. | | * Refer to the Chart of Accounts for exact wording of account titles.       | |
Comprehensive Problem 2, Part 1 Instructions Chart of Accounts Journal Ledger ! Unadjusted Trial Balance Adjusted Trial Balance Journal Shaded cells have fe DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 May 1 Rent Expense 531 5,000.00 2 Cash 110 5,000.00 3 115 36,000.00 1 May 3 Inventory Accounts Payable 4 210 36,000.00 1 5 May 4 Inventory 115 600.00 6 Cash 110 600.00 7 May 6 Accounts Receivable 112 41,000.00 1 8 Sales 410 41,000.00 1 9 Cost of Goods Sold 510 41,000.00 1 10 Inventory 115 41,000.00 1 11 May 7 Cash 110 22,300.00 1 12 Accounts Receivable 112 22,300.00 1 13 May 10 Cash 110 54,000.00 14 Sales 410 54,000.00 1 15 Cost of Goods Sold 510 32,000.00 16 Inventory 115 32,000.00 17 May 13 Accounts Payable 210 36,000.00 18 Inventory 115 35,280.00 rach 110 70nnn Check My Work 4 more Check My Work uses remaining. Instructions Chart of Accounts ! Journal Ledger unadjusted Thal Balance Adjusted Trial Balance Journal Shaded cells have 16 Inventory 115 32,000.00 17 May 13' Accounts Payable 210 36,000.00 18 Inventory 115 35,280.00 19 Cash 110 720.00 20 May 15 Advertising Expense 521 11,000.00 ! 21 Cash 110 11,000.00 + 22 Sales 410 67,130.00 1 25 May 16 Cash 110 1,370.00 1 24 Accounts Receivable 112 68,500.00 25 May 19 Inventory 115 18,700.00 1 26 Cash 110 18,700.00 27 May 20 Customers Refunds Payable 212 13,230.00 1 28 Cash 110 13,230.00 + 29 Inventory 115 8,000.00 30 Cost of Goods Sold 510 8,000.00 1 Points: 91.29 / 105 How does grading work? Check My Work 4 more Check My Work uses remaining. Journal Shaded cells have PAGE 21 JOURNAL Score: 331/392 ACCOUNTING EQUATION DATE DESCRIPTION DEBIT CREDIT ASSETS LIABILITIES EQUITY POST. REF. 112 1 May 20 Accounts Receivable 110,000.00 2 Sales 410 110,000.00 1 3 May 20Cost of Goods Sold 510 70,000.00 4 Inventory 115 70,000.00 5 May 21 Accounts Receivable 112 2,300.00 6 Cash 110 2,300.00 7 May 21 Cash 110 42,900.00 1 8 Accounts Receivable 112 42,900.00 9 May 21 Inventory 115 88,000.00 1 10 Accounts Payable 210 88,000.00 1 11 May 24 Accounts Payable 210 5,000.00 1 12 115 5,000.00 + Inventory May 26 Sales 13 410 7,500.00 1 14 Cash 110 7,500.00 15 May 26 Inventory 115 4,800.00 f 16 Cost of Goods Sold 510 4,800.00 1 17 May 28 Sales Salaries Expense 520 56,000.00 Check My Work Amore Check My Work uses remaining Instructions Chart of Accounts Journal Ledger ! Unadjusted Trial Balance ! Adjusted Trial Balance Journal Shaded cells have feed 13 May 26 Sales 410 7,500.00 + 14 Cash 110 7,500.00 15 May 26 Inventory 115 4,800.00 1 16 Cost of Goods Sold 510 4.800,00 1 17 May 28 Sales Salaries Expense 520 56,000.00 18 Office Salaries Expense 530 29,000.00 19 Cash 110 85,000.00 20 May 29 Store Supplies 118 2,400.00 1 21 Cash 110 2,400.00 22 May 30 Accounts Receivable 112 78,750.00 23 Sales 410 78,750.00 1 24 May 30 Cost of Goods Sold 510 47,000.00 + 25 115 47,000.00 Inventory May 30 Cash 110 111,200.00 1 27 Miscellaneous Selling Expense 529 1,100.00 28 Accounts Receivable 112 112,300.00 + 29 May 4 pse 222 43.00 43.00 Points: 85.28 / 101 Shaded cells have feedback. Unadjusted Trial Balance How does grading work? Palisade Creek Co. Score: 78/91 UNADJUSTED TRIAL BALANCE May 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 84,500.00 2 Accounts Receivable 247,450.00 3 Inventory 583,950.00 4. Estimated Returns Inventory 28,000.00 5 Prepaid Insurance 16,800.00 6 Store Supplies 13,800.00 7 Store Equipment 569,500.00 8 Accumulated Depreciation-Store Equipment 56,700.00 9 Accounts Payable 63,150.00 10 Salaries Payable 11 Customers Refunds Payable 50,000.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,359,250.00 Shaded cells have fo Adjusted Trial Balance HOW does grading work! Palisade Creek Co. Score: 91/103 ADJUSTED TRIAL BALANCE May 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 84,500.00 2 Accounts Receivable 187,450.00 3 Inventory 570,000.00 4 Estimated Returns Inventory 63,000.00 5 Prepaid Insurance 4,800.00 6 Store Supplies 4,000.00 7 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 50,000.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,299,250.00 2070 100 eck My Work 4 more Check My Work uses remaining. Shaded cells have fee Adjusted Trial Balance 10 Salaries Payable 13,600.00 11 Customers Refunds Payable 50,000.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,299,250.00 16 Cost of Goods Sold 2,979,150.00 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 6,182,000.00 6,182,000.00 Comprehensive Problem 2, Part 1 Instructions Chart of Accounts Journal Ledger ! Unadjusted Trial Balance Adjusted Trial Balance Journal Shaded cells have fe DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 May 1 Rent Expense 531 5,000.00 2 Cash 110 5,000.00 3 115 36,000.00 1 May 3 Inventory Accounts Payable 4 210 36,000.00 1 5 May 4 Inventory 115 600.00 6 Cash 110 600.00 7 May 6 Accounts Receivable 112 41,000.00 1 8 Sales 410 41,000.00 1 9 Cost of Goods Sold 510 41,000.00 1 10 Inventory 115 41,000.00 1 11 May 7 Cash 110 22,300.00 1 12 Accounts Receivable 112 22,300.00 1 13 May 10 Cash 110 54,000.00 14 Sales 410 54,000.00 1 15 Cost of Goods Sold 510 32,000.00 16 Inventory 115 32,000.00 17 May 13 Accounts Payable 210 36,000.00 18 Inventory 115 35,280.00 rach 110 70nnn Check My Work 4 more Check My Work uses remaining. Instructions Chart of Accounts ! Journal Ledger unadjusted Thal Balance Adjusted Trial Balance Journal Shaded cells have 16 Inventory 115 32,000.00 17 May 13' Accounts Payable 210 36,000.00 18 Inventory 115 35,280.00 19 Cash 110 720.00 20 May 15 Advertising Expense 521 11,000.00 ! 21 Cash 110 11,000.00 + 22 Sales 410 67,130.00 1 25 May 16 Cash 110 1,370.00 1 24 Accounts Receivable 112 68,500.00 25 May 19 Inventory 115 18,700.00 1 26 Cash 110 18,700.00 27 May 20 Customers Refunds Payable 212 13,230.00 1 28 Cash 110 13,230.00 + 29 Inventory 115 8,000.00 30 Cost of Goods Sold 510 8,000.00 1 Points: 91.29 / 105 How does grading work? Check My Work 4 more Check My Work uses remaining. Journal Shaded cells have PAGE 21 JOURNAL Score: 331/392 ACCOUNTING EQUATION DATE DESCRIPTION DEBIT CREDIT ASSETS LIABILITIES EQUITY POST. REF. 112 1 May 20 Accounts Receivable 110,000.00 2 Sales 410 110,000.00 1 3 May 20Cost of Goods Sold 510 70,000.00 4 Inventory 115 70,000.00 5 May 21 Accounts Receivable 112 2,300.00 6 Cash 110 2,300.00 7 May 21 Cash 110 42,900.00 1 8 Accounts Receivable 112 42,900.00 9 May 21 Inventory 115 88,000.00 1 10 Accounts Payable 210 88,000.00 1 11 May 24 Accounts Payable 210 5,000.00 1 12 115 5,000.00 + Inventory May 26 Sales 13 410 7,500.00 1 14 Cash 110 7,500.00 15 May 26 Inventory 115 4,800.00 f 16 Cost of Goods Sold 510 4,800.00 1 17 May 28 Sales Salaries Expense 520 56,000.00 Check My Work Amore Check My Work uses remaining Instructions Chart of Accounts Journal Ledger ! Unadjusted Trial Balance ! Adjusted Trial Balance Journal Shaded cells have feed 13 May 26 Sales 410 7,500.00 + 14 Cash 110 7,500.00 15 May 26 Inventory 115 4,800.00 1 16 Cost of Goods Sold 510 4.800,00 1 17 May 28 Sales Salaries Expense 520 56,000.00 18 Office Salaries Expense 530 29,000.00 19 Cash 110 85,000.00 20 May 29 Store Supplies 118 2,400.00 1 21 Cash 110 2,400.00 22 May 30 Accounts Receivable 112 78,750.00 23 Sales 410 78,750.00 1 24 May 30 Cost of Goods Sold 510 47,000.00 + 25 115 47,000.00 Inventory May 30 Cash 110 111,200.00 1 27 Miscellaneous Selling Expense 529 1,100.00 28 Accounts Receivable 112 112,300.00 + 29 May 4 pse 222 43.00 43.00 Points: 85.28 / 101 Shaded cells have feedback. Unadjusted Trial Balance How does grading work? Palisade Creek Co. Score: 78/91 UNADJUSTED TRIAL BALANCE May 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 84,500.00 2 Accounts Receivable 247,450.00 3 Inventory 583,950.00 4. Estimated Returns Inventory 28,000.00 5 Prepaid Insurance 16,800.00 6 Store Supplies 13,800.00 7 Store Equipment 569,500.00 8 Accumulated Depreciation-Store Equipment 56,700.00 9 Accounts Payable 63,150.00 10 Salaries Payable 11 Customers Refunds Payable 50,000.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,359,250.00 Shaded cells have fo Adjusted Trial Balance HOW does grading work! Palisade Creek Co. Score: 91/103 ADJUSTED TRIAL BALANCE May 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 84,500.00 2 Accounts Receivable 187,450.00 3 Inventory 570,000.00 4 Estimated Returns Inventory 63,000.00 5 Prepaid Insurance 4,800.00 6 Store Supplies 4,000.00 7 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 50,000.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,299,250.00 2070 100 eck My Work 4 more Check My Work uses remaining. Shaded cells have fee Adjusted Trial Balance 10 Salaries Payable 13,600.00 11 Customers Refunds Payable 50,000.00 12 Common Stock 100,000.00 13 Retained Earnings 585,300.00 14 Dividends 135,000.00 15 Sales 5,299,250.00 16 Cost of Goods Sold 2,979,150.00 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 6,182,000.00 6,182,000.00
