|
|
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
|
1. 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 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.
|
|
|
4.
|
At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).
|
A.
|
Inventory on May 31, $570,000
|
|
B.
|
Insurance expired during the year, $12,000
|
|
C.
|
Store supplies on hand on May 31, $4,000
|
|
D.
|
Depreciation for the current year, $14,000
|
|
E.
|
Accrued salaries on May 31:
|
|
Sales salaries, $7,000
|
|
|
Office salaries, $6,600
|
|
Total accrued salaries: $13,600
|
|
|
|
F.
|
The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold.
|
|
iReusecondoms
Chap5.docx
