Your mission is to complete a comprehensive accounting cycle problem. You will complete:

1. General Journal Entries

2. Worksheet

3. Adjusting Journal Entries

4. General Ledger

5. Income Statement (Multiple Step format)

6. Statement of Retained Earnings

7. Balance Sheet (Classified format)

8. Closing Entries

9. Post Closing Trial Balance

Colo Company

May 1 - Issued Check No. 3410 to S&P Management Co. in payment of the May rent, $4,000. (Use two lines to record the transaction. Charge 80% of the rent to Rent Expense Selling Space and the balance to Rent Expense Office Space.)

May 2 Sold merchandise on credit to Hensel Company, Invoice No. 8785, for $6,100 (cost is $4,100)

May 2 - Issued a $175 credit memorandum to Knox Co. for defective (worthless) merchandise sold on April 28 and returned for credit. The total selling price (gross) was $4,725.

May 3 Received a $798 credit memorandum from Peyton Products for the return of merchandise purchased on April 29.

May 4 Purchased the following on credit from Gear Supply Co. Invoice dated May 4, terms n/10 EOM.

May 5 Received payment from Knox Co., for the balance from the April 28 sale less the May 2 return and the discount

May 8 Issued Check No. 3411 to Peyton Products to pay for the $7,098 of merchandise purchased on April 29 less the May 3 return and a 2% discount.

May 9 Sold store supplies to the merchant next door at their cost of $350 cash. (Hint what are we selling to the next door neighbor, it is not Merchandise Inventory and does not have a cost associated with it)

May 10 Purchased $4,074 of office equipment on credit from Gear Supply Co., invoice dated May 10, terms n/10 EOM.

May 11 Received payment from Hensel Company for the May 2 sale less the discount.

May 11 Purchased $8,800 of merchandise from Garcia, Inc., invoice dated May 10, terms 2/10, n/30.

May 12 Received an $854 credit memorandum from Gear Supply Co. for the return of defective office equipment received on May 10.

May 15 Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,320, and office salaries, $3,150. Cashed the check and paid the employees.

May 15 Cash sales for the first half of the month are $59,220 (cost is $38,200). (Cash sales are recorded daily but are recorded only twice here to reduce repetitive entries.)

May 16 Sold merchandise on credit to Hensel Company, Invoice No. 8786, for $3,990 (cost is $1,890)

May 17 Purchased $13,650 of merchandise from Fink Corp, invoice dated May 14, terms 2/10, n/60.

May 19 Issued Check No. 3413 to Garcia, Inc. in payment of its May 11 invoices less the discount.

May 22 Sold merchandise to Lee Services, Invoice No. 8787, for $6,850 (cost is $4,990), terms 2/10, n/60.

May 23 Issued Check No. 3414 to Fink Corp. in payment of its May 14 invoices less the discount.

May 24 Purchased the following on credit from Gear Supply Co. Invoice dated May 24, terms n/10 EOM.

May 25 Purchased $3,080 of merchandise from Peyton Products, invoice dated May 23, terms 2/10, n/30.

May 26 Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,210 (cost is $8,230).

May 26 Issued Check No. 3415 to Perennial Power in payment of the May electric bill, $1,283.

May 29 The owner of Colo Company, Jenny Colo, used Check No. 3416 to withdraw $7,000 cash from the business for personal use.

May 30 Received payment from Lee Services for the May 22 sale less the discount.

May 30 Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,320, and office salaries, $3,150. Cashed the check and paid the employees

May 31 Cash sales for the last half of the month are $66,052 (cost is $42,500)

REQUIRED:

Enter these transactions in the General Journal. Assume a perpetual inventory system.

Terms for all credit sales are 2/10, n/30 unless stated differently.

Using the work sheet / trial balance provided to you, complete using the following information for accounting adjustments.

A. Expired Insurance, $321.

B. Ending store supplies inventory, $692

C. Ending office supplies inventory, $225

D. Depreciation of store equipment, $499

E. Depreciation of office equipment, $758

Complete the work sheet to include the Income Statement and Balance Sheet/Statement of Owners Equity, and tie out the balances.

Prepare a May 20xx multiple-step income statement, a May 20xx statement of owners equity, and a May 31, 20xx, classified balance sheet.

Check figures: Net Income = $29,009

Total Assets = $382,053

Prepare a post-closing trial balance (be sure to include the closing entries)