Question

In 2018, Skip Slider launched a curling supplies company called “Curling Rocks,” which buys and sells a variety of curling supplies.  

With the recent Olympic Gold Medal win by the men’s team, Skip Slider has reached out to you and asked if you could analyze the entries for the month of May and prepare the company’s first set of financial statements as of May 31, 2018. Here are some company details:

1. The company is set up as a sole proprietorship
2. May 31 is the company’s fiscal year end
3. Terms for all credit sales are 2/10, n/30 unless stated differently
4. The company uses a perpetual inventory system

5. 4) Multiple Step Income Statement

6. 5) Statement of Owner's Equity

7. 6) Balance Sheet

   7) Post Closing Trial Balance

8. May 1 - Issued Check No. 5200 to L&J Management Co. in payment of the May rent, $5,000. (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 Yellow Rock Company, Invoice No. 9501, for $4,500 (cost is $ 2,000)

   May 3 - Issued a $150 credit memorandum to Yellow Rock Company for defective (worthless) merchandise sold on May 2 and returned for credit.

   May 4 – Purchased the following on credit from Jerry’s Curling Supply Co. Invoice dated May 4, terms n/10 EOM.

   Merchandise $27,027.00

   Store supplies $754

   Office supplies $38

   Total 27,819.00

   May 8 – Issued Check No. 5201 to Jerry’s Curling Supply Company for merchandise purchased on May 4^th.

   May 9 – Sold store supplies to the merchant next door at their cost of $220 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 $2,047 of office equipment on credit from Jerry’s Curling Supply Co., invoice dated May 10, terms n/10 EOM.

   May 11 – Purchased $6,200 of merchandise from Red Rock, Inc., invoice dated May 10, terms 2/10, n/30.

   May 12 – Received a $97 credit memorandum from Jerry’s Curling Supply for the return of defective office equipment received on May 10. May 15 – Issued Check No. 5202, payable to Payroll, in payment of sales salaries, $3,230, and office salaries, $1,510. Cashed the check and paid the employees.

   May 15 – Cash sales for the first half of the month are $31,280 (cost is $13,200). (Cash sales are recorded daily but are recorded in a lump sum format through two entries May 15 and May 31)

   May 16 – Sold merchandise on credit to House Curling Company, Invoice No. 9502, for $3,990 (cost is $1,890)

   May 17 – Purchased $23,650 of merchandise from Olympics Gold, invoice dated May 17, terms 2/10, n/60.

   May 19 – Issued Check No. 5203 to Red Rock, Inc. in payment of its May 11 invoice less the discount.

   May 22 – Sold merchandise to Sweep Services, Invoice No. 9503, for $8,650 (cost is $4,990), terms 2/10, n/60.

   May 23 – Issued Check No. 5204 to Olympics Gold in payment of its May 17 invoice less the discount.

   May 24 – Purchased the following on credit from Jerry’s Curling Supply Company Invoice dated May 24, terms n/10 EOM.

   May 25 – Purchased $3,080 of merchandise from Burned Stone Curling, invoice dated May 25, terms 2/10, n/30.

   May 26 – Sold merchandise on credit to Draw Weight, Invoice No. 9504, for $21,315 (cost is $12,230).

   May 26 – Issued Check No. 5205 to Pebble Power in payment of the May electric bill, $983.

   May 29 – The owner of Curling Rocks, Skip Slider, used Check No. 5206 to withdraw $4,800 cash from the business for personal use.

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

   May 30 – Issued Check No. 5207, payable to Payroll, in payment of sales salaries, $3,230, and office salaries, $1,510. Cashed the check and paid the employees.

   May 31 – Cash sales for the last half of the month are $46,025 (cost is $22,500)

Answer 1

1. Journal entries for May 2018 transaction
Date	Account Titles & Description	Debit	Credit
1-May	Rent Expense-Selling Space	$4,000
	Rent Expense-Office Space	$1,000
	Bank		$5,000
	(To record payment of rent to L&J management co.)
2-May	Accounts Receivable	$4,500
	Sales		$4,500
	(To record merchandise sold on credit to Yellow Rock Company)
2-May	Cost of Sales	$2,000
	Inventory		$2,000
	(To record cost of sales)
3-May	Sales Return	$150
	Accounts Receivable		$150
	(To record Credit memo issued for defective merchandise)
4-May	Inventory	$27,027
	Store Supplies	$754
	Office Supplies	$38
	Accounts Payable		$27,819
	(To record purchases made on credit from Jerry's Curling supply company)
8-May	Accounts Payable	$27,819
	Bank		$27,819
	(To record check issued to Jerry's curling supply company)
9-May	Cash	$220
	Store Supplies		$220
	(To record store supplies sold to next door neighbour)
10-May	Office Equipment	$2,047
	Accounts payable		$2,047
	(To record office equipment purchased from Jerry's curling supply company)
11-May	Inventory	$6,200
	Accounts payable		$6,200
	(To record merchandise purchased from Red Rock, Inc)
12-May	Accounts payable	$97
	Office Equipment		$97
	(To record credit memo received from Jerry's curling supply company)
15-May	Sales Salaries	$3,230
	Office Salaries	$1,510
	Cash		$4,740
	(To record salaries paid to employees)
15-May	Cash	$31,280
	Sales		$31,280
	(To record cash sales for period from May 1 to May 15)
15-May	Cost of sales	$13,200
	Inventory		$13,200
	(To record cost of sales for cash sales)
16-May	Accounts receivable	$3,990
	Sales		$3,990
	(To record credit sales to House Curling company)
16-May	Cost of sales	$1,890
	Inventory		$1,890
	(To record cost of sales for sales to House Curling company)
17-May	Inventory	$23,650
	Accounts payable		$23,650
	(To record merchandise purchased from Olympics Gold)
19-May	Accounts payable	$6,200
	Purchase discount		$124
	Bank		$6,076
	(To record check issued to Red Rock, Inc less 2% discount)
22-May	Accounts receivable	$8,650
	Sales		$8,650
	(To record merchandise sold to Sweep Services)
22-May	Cost of sales	$4,990
	Inventory		$4,990
	(To record cost of sales for sales to Sweep Services)
23-May	Accounts payable	$23,650
	Purchase discount		$473
	Bank		$23,177
	(To record check issued to Olympics Gold less 2% discount)
25-May	Inventory	$3,080
	Accounts payable		$3,080
	(To record purchase of merchandise from Burned stone curling)
26-May	Accounts receivable	$21,315
	Sales		$21,315
	(To record merchandise sold to Draw Weight)
26-May	Cost of sales	$12,230
	Inventory		$12,230
	(To record cost of sales for sales to Draw Weight)
26-May	Utility expenses	$983
	Bank		$983
	(To record payment to Pebble Power for electricity bill)
29-May	Drawings	$4,800
	Bank		$4,800
	(To record cash withdrawn for personal use)
30-May	Cash	$8,477
	Sales discount	$173
	Accounts receivable		$8,650
	(To record payment received from Sweep Services less 2% discount)
30-May	Sales Salaries	$3,230
	Office Salaries	$1,510
	Cash		$4,740
	(To record salaries paid to employees)
31-May	Cash	$46,025
	Sales		$46,025
	(To record cash sales for period from May 16 to May 31)
31-May	Cost of sales	$22,500
	Inventory		$22,500
	(To record cost of sales for cash sales)

Looks like some information is missing regarding May 24 transaction, please provide the information to complete the financial statement