The post-closing trial balance for Lee Co. follows. Lee Co. reports under ASPE.

The subsidiary ledgers contain the following information:

1. Accounts Receivable?W. Karasch, $3,250; L. Cellars, $7,400; G. Parrish, $4,750

2. Accounts Payable?Summers Corp., $10,500; Cobalt Sports, $15,500; Buttercup Distributors, $17,400 Lee uses a perpetual inventory system. The transactions for May 2021 are as follows:

May 3 Sold merchandise on account to B. Simone, $2,400. The cost of the goods sold was $1,050.

5 Purchased merchandise from WN Shaw, $2,600, on account.

7 Received a cheque from G. Parrish, $2,800, in partial payment of account.

11 Paid freight on merchandise purchased, $318.

12 Paid rent of $1,500 for May.

13 Received payment in full from B. Simone.

14 Issued a credit memo to acknowledge $750 of merchandise returned by W. Karasch. The merchandise (original cost, $325) was restored to inventory.

May 15 Sent Buttercup Distributors a cheque in full payment of account.

17 Purchased merchandise from Lancio Co., $2,100, on account.

18 Paid salaries of $4,700.

20 Gave Cobalt Sports a two-month, 10% note for $15,500 in full payment of account payable.

20 Returned merchandise costing $510 to Lancio for credit.

23 Total cash sales amounted to $9,500. The cost of goods sold was $4,450.

27 Sent WN Shaw a cheque for $1,000, in partial payment of account.

29 Received payment on a note of $40,000 from Cole Company.

30 Purchased equipment on account from Summers Corp., $4,000.

31 C. Lee withdrew $1,000 cash for personal use.

Instructions

a. Open general and subsidiary ledger accounts and record April 30, 2021, balances.

b. Record the May transactions in a sales journal, a purchases journal, a cash receipts journal, a cash payments journal, and a general journal, as illustrated in this appendix.

c. Post the appropriate amounts to the subsidiary and general ledger accounts.

d. Prepare a trial balance at May 31, 2021.

e. Determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

Transcribed Image Text:

LEE CO. Post-Closing Trial Balance April 30, 2021 Debit Credit 101 Cash $ 36,700 112 Accounts receivable 115 Notes receivable-Cole Company 120 Merchandise inventory 157 Equipment 158 Accumulated depreciation-equipment 200 Notes payable 201 Accounts payable 301 C. Lee, capital 310 C. Lee, drawings 15,400 48,000 22,000 8,200 $ 1,800 43,400 85,100 401 Sales 410 Sales returns and allowances 505 Cost of goods sold 725 Salaries expense 730 Rent expense $130,300 $130,300