Question

Let’s continue our accounting for Lydon’s Yard Care, Inc., from Chapter 3 . Starting in May, Lydon’s Yard Care, Inc., has begun selling plants that it purchases from a wholesaler. During May, Lydon’s Yard Care, Inc., completed the following transactions:
May 2 Completed lawn service and received cash of $400.
5 Purchased 120 plants on account for inventory, $307, plus freight-in of $5. Freight-in was added to the invoice by the seller. Credit terms were n/30.
15 Sold 30 plants on account, $300 (cost $78).
17 Consulted with a client on landscaping design for a fee of $150 on account.
20 Purchased 110 plants on account for inventory, $374.
21 Paid on account, $1,300.
25 Sold 120 plants for cash, $840 (cost $336).
31 Recorded the following adjusting entries:
Accrued salaries for the month of May equal $200
Depreciation on equipment $25
Physical count of plant inventory, 75 plants (cost $255)

Refer to the T-accounts for Lydon’s Yard Care, Inc., from the Continuing Exercise in Chapter 3. Use the ending balances on April 30 and set up T-accounts for the month of May.

Requirements
1. Journalize and post the May transactions to the T-accounts. Omit explanations. Compute each account balance, and denote the balance as Bal. Open additional accounts as necessary.
2. Prepare the May income statement of Lydon’s Yard Care, Inc., using the single-step format.



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  • CreatedApril 29, 2014
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