Question

Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2019 (unless otherwise indicated), are as follows:

110	Cash	$ 83,600
112	Accounts Receivable	233,900
115	Merchandise 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	Customers Refunds Payable	50,000
212	Salaries Payable	—
310	Lynn Tolley, Capital, June 1, 2018	685,300
311	Lynn Tolley, Drawing	135,000
410	Sales	5,069,000
510	Cost of Merchandise 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 merchandise 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 merchandise 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 merchandise 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 merchandise 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. ALL I NEED IS A STATEMENT OF OWNERS EQUITY based on the infomation above!! 8. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare a statement of owner’s equity. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare a statement of owner’s equity. Be sure to complete the statement heading. If a net loss has been incurred or there has been a decrease in owner’s equity, enter that amount as a negative number using a minus sign. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries.

Answer 1

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S No	Date	Account	Debit	Credit
1	May 1	Rent Expense	$           5,000
1	May 1	Cash		$           5,000
		(Being Rent Paid)
2	May 3	Merchandise Inventory	$         36,000
2	May 3	Accounts Payable		$         36,000
		(being inventory purchased)
3	May 4	Merchandise Inventory	$              600
3	May 4	Cash		$              600
		(Freight Paid)
4	May 6	Accounts Receivable	$         68,500
4	May 6	Sales		$         68,500
		(being Sales done)
5	May 6	Cost of Merchandise Sold	$         41,000
5	May 6	Merchandise Inventory		$         41,000
		(COGS of sales)
6	May 7	Cash	$         22,300
6	May 7	Accounts Receivable		$         22,300
		(being advance received)
7	May 10	Cash	$         54,000
7	May 10	Sales		$         54,000
		(Cash Sale)
8	May 10	Cost of Merchandise Sold	$         32,000
8	May 10	Merchandise Inventory		$         32,000
		(COGS)
9	May 13	Accounts Payable	$         36,000
9	May 13	Cash		$         35,280
9	May 13	Merchandise Inventory		$              720
		(payment done after taking discount)
10	May 15	Advertising Expense	$         11,000
10	May 15	Cash		$         11,000
11	May 16	Cash	$         67,130
11	May 16	Sales Discount	$           1,370
11	May 16	Accounts Receivable		$         68,500
		(Cash received after discount)
12	May 19	Merchandise Inventory	$         18,700
12	May 19	Cash		$         18,700
		(Inventory purchased)
13	May 19	Accounts Payable	$         33,450
13	May 19	Cash		$         33,450
		(Paid on account to Button and co)
14	May 20	Customer Refund Payable	$         13,230
14	May 20	Cash		$         13,230
15	May 20	Merchandise Inventory	$           8,000
15	May 20	Estimated Returns Inventory		$           8,000
16	May 20	Accounts Receivable	$       110,000
16	May 20	Sales		$       110,000
17	May 20	Cost of Merchandise Sold	$         70,000
17	May 20	Merchandise Inventory		$         70,000
18	May 21	Accounts Receivable	$           2,300
18	May 21	Cash		$           2,300
19	May 21	Cash	$         42,900
19	May 21	Accounts Receivable		$         42,900
20	May 21	Merchandise Inventory	$         88,000
20	May 21	Accounts Payable		$         88,000
21	May 24	Accounts Payable	$           5,000
21	May 24	Merchandise Inventory		$           5,000
22	May 26	Customer Refund Payable	$           7,500
22	May 26	Cash		$           7,500
23	May 26	Merchandise Inventory	$           4,800
23	May 26	Estimated Returns Inventory		$           4,800
24	May 28	Sales Salaries Expense	$         56,000
24	May 28	Office Salaries Expense	$         29,000
24	May 28	Cash		$         85,000
25	May 28	Store Supplies	$           2,400
25	May 28	Cash		$           2,400
26	May 30	Accounts Receivable	$         78,750
26	May 30	Sales		$         78,750
27	May 30	Cost of Merchandise Sold	$         47,000
27	May 30	Merchandise Inventory		$         47,000
28	May 30	Sales Discount	$           2,100
28	May 30	Cash	$       111,200
28	May 30	Accounts Receivable		$       113,300
29	May 31	Accounts Payable	$         83,000
29	May 31	Cash		$         82,170
29	May 31	Merchandise Inventory		$              830