In: Accounting
Journalize the closing entries. Then post the journal to the general ledger you created in part 1. Indicate closed accounts by inserting a line in both the balance columns opposite the closing entry. Insert the new balance in the retained earnings account.
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. |
As per rules I am answering the first 4 subparts of the question
1: May 1 Rent expense- Dr 5000
Cash -Cr 5000
2: May 3 Cost of goods sold-Dr 36000
Accounts payable-Cr 36000
3: May 4 Cost of goods sold-Dr 600
Cash- Cr 600
4: May 6 Accounts receivable-Dr 68500
Sales-Cr 68500
Cost of goods sold-Dr 41500
Inventory-Cr 41500