Palisade Creek Co. is a merchandising business. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows:

110Cash$83,600112Accounts Receivable233,900115Merchandise Inventory624,400116Estimated Returns Inventory28,000117Prepaid Insurance16,800118Store Supplies11,400123Store Equipment569,500124Accumulated DepreciationStore Equipment56,700210Accounts Payable96,600211Salaries Payable212Customers Refunds Payable50,000310Lynn Tolley, Capital, June 1, 2015685,300311Lynn Tolley, Drawing135,000312Income Summary410Sales5,069,000510Cost of Merchandise Sold2,823,000520Sales Salaries Expense664,800521Advertising Expense281,000522Depreciation Expense523Store Supplies Expense529Miscellaneous Selling Expense12,600530Office Salaries Expense382,100531Rent Expense83,700532Insurance Expense539Miscellaneous Administrative Expense7,800

Part 1:Using the attachedspreadsheet, enter the balances of each of the accounts in the appropriate balance column of a four-column account. WriteBalancein the item section, and place a check mark () in the Posting Reference column. 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.

For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".

Comprehensive Problem 2

Part 4 and 6:

Note: You must complete parts 1, 2 and 3 before attempting to complete part 4 and part 6. Part 5 is an optional work sheet.

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

a.Merchandise inventory on May 31$570,000b.Insurance expired during the year12,000c.Store supplies on hand on May 314,000d.Depreciation for the current year14,000e.Accrued salaries on May 31:Sales salaries$7,000Office salaries6,60013,600f.The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of merchandise sold.

6.Journalize the adjusting entries. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0". Post the adjusting entries to the attachedspreadsheetyou used in parts 1 and 2.

1.Prepare an income statement.

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. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 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.

Comprehensive Problem 2

Part 10:

You must complete parts 1, 2, 3, 4, 6, 7, 8 and 9 before attempting to complete part 10. Part 5 is optional.

Prepare a post-closing trial balance. If an amount box does not require an entry, leave it blank.