Question
Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 20Y6 (unless
Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 20Y6 (unless otherwise indicated), are as follows. Assume all accounts have normal balances.
110 | Cash | $83,600 | 312 | Dividends | $135,000 | ||||
112 | Accounts Receivable | 233,900 | 410 | Sales | 5,069,000 | ||||
115 | Inventory | 624,400 | 510 | Cost of Goods Sold | 2,823,000 | ||||
116 | Estimated Returns Inventory | 28,000 | 520 | Sales Salaries Expense | 664,800 | ||||
117 | Prepaid Insurance | 16,800 | 521 | Advertising Expense | 281,000 | ||||
118 | Store Supplies | 11,400 | 522 | Depreciation Expense | |||||
123 | Store Equipment | 569,500 | 523 | Store Supplies Expense | |||||
124 | Accumulated DepreciationStore Equipment | 56,700 | 529 | Miscellaneous Selling Expense | 12,600 | ||||
210 | Accounts Payable | 96,600 | 530 | Office Salaries Expense | 382,100 | ||||
211 | Salaries Payable | 531 | Rent Expense | 83,700 | |||||
212 | Customers Refunds Payable | 50,000 | 532 | Insurance Expense | |||||
310 | Common Stock | 100,000 | 539 | Miscellaneous Administrative Expense | 7,800 | ||||
311 | Retained Earnings | 585,300 | 539 |
Part 1: Journalize the transactions below for May, the last month of the fiscal year. If an amount box does not require an entry, leave it blank.
May 1: Paid rent for May, $5,000.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 1 | ||||
May 3: Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 3 | ||||
May 4: Paid freight on purchase of May 3, $600.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 4 | ||||
May 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.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 6-Sales | ||||
May 6-Cost | ||||
May 7: Received $22,300 cash from Halstad Co. on account.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 7 | ||||
May 10: Sold merchandise for cash, $54,000. The cost of the goods sold was $32,000.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 10-Sales | ||||
May 10-Cost | ||||
May 13: Paid for merchandise purchased on May 3.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 13 | ||||
May 15: Paid advertising expense for last half of May, $11,000.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 15 | ||||
May 16: Received cash from sale of May 6.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 16 | ||||
May 19: Purchased merchandise for cash, $18,700.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 19 | ||||
May 19: Paid $33,450 to Buttons Co. on account.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 19 | ||||
May 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.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 20-Refund | ||||
May 20-Cost | ||||
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.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 20-Sales | ||||
May 20-Cost | ||||
May 21: For the convenience of Crescent Co., paid freight on sale of May 20, $2,300.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 21 | ||||
May 21: Received $42,900 cash from Gee Co. on account.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 21 | ||||
May 21: Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 21 | ||||
May 24: Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 24 | ||||
May 26: Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 26-Refund | ||||
May 26-Cost | ||||
May 28: Paid sales salaries of $56,000 and office salaries of $29,000.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 28 | ||||
May 29: Purchased store supplies for cash, $2,400.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 29 | ||||
May 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.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 30-Sales | ||||
May 30-Cost | ||||
May 30: Received cash from sale of May 20 plus freight paid on May 21.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 30 | ||||
May 31: Paid for purchase of May 21, less return of May 24.
Date | Description | Post. Ref. | Debit | Credit |
---|---|---|---|---|
May 31 | ||||
Part 2: Using the attached spreadsheet, post the journal entries from Part 1 to the general ledger. Extend 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.
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