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, 2018, are as follows: Assume all accounts have normal balances.

110	Cash	$ 83,600
112	Accounts receivable	233,900
115	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	Salaries payable	—
212	Customers refunds payable	50,000
310	Common stock	100,000
311	Retained earnings	585,300
312	Dividends	135,000
313	Income summary	—
410	Sales	5,069,000
510	Cost of goods 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 goods 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 goods 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 goods 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 goods 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. 5. (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. A. Journalize the adjusting entries. Record the adjusting entries on Page 22 of the journal.* B. Post the adjusting entries. 7. Prepare an adjusted trial balance. Accounts with zero balances can be left blank. * Refer to the Chart of Accounts for exact wording of account titles

Answer 1

page 20 of the journal

May 1	Rent expense	$5000
	cash		$5000
May3	Inventory	$36,000
	Accounts payable		$36,000
May 4	Miscellaneous selling expense	$600
	Cash		$600
May6	Accounts receivable	$68,500
	Sales		$68,500
May 6	Cost of goods sold	$41000
	Inventory		$41000
May 7	Cash	$22,300
	Accounts Receivable		$22,300
May 10	Cash	$54000
	Accounts Receivable		$54000
May 13	Accounts Payable	$36000
	Cash		$35,280
	Inventory		$720
May 15	Advertising expense	$11000
	Cash		$11000
May 16	Cash	$67130
	Sales	$1370
	Accounts Receivable		$68500
May 19	Accounts Payable	$18700
	Cash		$18700
May 19	Inventory	$33450
	Accounts Payable		$33450
May 20	Estimated returns inventory	$13200
	Cash		$13200
May 20	Inventory	$8000
	Cost of Goods Sold		$8000

page 21 of the journal

		Debbit($)	Credit($)
May20	Accounts receivable	110,000
	Sales		110,000
May20	Cost of goods sold	70,000
	Inventory		70,000
May 21	Miscellaneous selling expense	2300
	Cash		2300
May 21	Cash	42900
	Accounts Receceivable		42900
May 21	Inventory	88000
	Accounts Payable		88000
May 24	Accounts Payable	5000
	Estimated returns inventory		5000
May 26	Accounts Receivable	7500
	Cash		7500
May 26	Inventory	4800
	Cost of goods sold		4800
May 28	Sales salaries expense	56000
	Office salaries expense	29000
	Cash		85000
May 29	Store supplies	2400
	Cash		2400
May 30	Accounts Receivable	78750
	Sales		78750
May 30	Cost of goods sold	47000
	Inventory		47000
May 30	Cash	107800
	Sales	2200
	Accounts Receivables		110000