Question

In: Accounting

Journalize the closing entries. Then post the journal to the general ledger you created in part...

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.

Solutions

Expert Solution

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

                           

                           


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