Palisade Creek Co. is a merchandising business. the account balance for Palisade Creek Co. as of May 1, 2014 (unless otherwise indicated), are the following:

110 Cash $83,600

112 Accounts Recievable 233, 900

115 Merchandise Inventory 602,400

116 Prepaid Insurance 16,800

117 Store Supplies 11,400

123 Store Equipment 569,500

124 Accumulated Depreciation - Store Equipment 56,700

210 Accounts Payable 96,600

211 Salaries Payable ----

310 Lynn Tolley, Capital, June 1, 2013 685,300

311 Lynn Tolley, Drawing 135,000

312 Income Summary ----

410 Sales 5,221,100

411 Sales Return and Allowances 92,700

412 Sales Discounts 59,400

510 Cost of Merchandise 2,823,000

520 Sales Salaries Expense 664,800

521 Advertising Expense 281,000

522 Depreciation Expense ----

523 Store Supplies Expense ----

529 Miscellaneous 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:

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, $6,000.

6. Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $687,500. the cost of the merchandise sold was $41,00.

7. Received $22,300 cash from Halstad Co. on account, no discount.

10. Sold merchandise for cash $54,000. the cost of the merchandise sold was $32,000.

13. Paid for merchandise purchased on May 3, less discount.

14. Recieved merchandise returned on sale of May 6, $13,500. The cost of the merchandise returned was $8,000.

15. Paid advertising expense for last half of May, $11,000.

16. Recieved cash from sale of May6 6, less return of May 14 and discount.

19. Purchased merchandise for cash, $18,700.

19. Paid $33,450 to Buttons Co. on account, no discount.

Record the following transaction on page 21 of the journal.

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.

21. For the convenience of Crescent Co. paid freight on sale of May 20, $2,300.

21. Purchased merchandise on account from Osterman Co. terms 1/10, n/30, FOB destination $88,000.

24. Returned $5,000 of damaged merchandise purchased on May 21, receiving credit from seller.

26. Returned cash on sales made for cash, $7,500. The cost of 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 poing $78,750. The cost of merchandise sold was $47,000

30. eceived cash from sale of May 20, less discount, plus freight paid on May 21.

31. Paid for purchase of May 21, less return of May 24 and discount.

Instructions:

1. Enter the balances of each of the accounts in the appropriate balance column of a four-coloumn account. Write balance in the item section, and place a check mark in the post referencing column. Journalize the transactions for july, starting on page 20 of the journal.

2. Post the journal to the general ledger, extending the month ended balances to the appropriate balance columns after all posting is completed. In this problem you re not required to update or post to the accounts receivable and accounts payable subsidary ledgers.

3.Prepare an unadjusted trial balance.

4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

A. Merchandise Inventory on May 31 $550,000

B. Insurance expired during the year 12,000

C. Store supplies on hand May 31 4,000

D. Depreciation for the current year 14,000

E. Accured salaries on May 31:

Sales Salaries $7,000

Office Salaries $6,600 13,600

5. Enter the unadjusted trial balance on the 10-column end-of-period spreadsheet (worksheet), and complete the spreadsheet.

6. Journalize and post the adjusting entries. Record the adjusting entries on page 22 of the journal.

7. Prepare an adjusted trial balance.

8. Prepare an income statement, a statement of owner's equity, and a balance sheet.

9. Prepare and post the closing entries. Record the closing entries on page 23 of the journal. 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.

10. Prepare a post-closing trial balance.