Palisade Creek Co. is a merchandising business. The account balances for Palisade Creek Co. as of May 1, 2014 (unless otherwise indicated), are as follows:

During May, the last month of the fiscal year, the following transactions were completed:
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 merchandise sold was $41,000.
7. Received $22,300 cash from Halstad Co. on account, no discount.
10. Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.
13. Paid for merchandise purchased on May 3, less discount.
14. Received merchandise returned on sale of May 6, $13,500. The cost of the merchandise returned was $8,000.
15. Paid advertising expense for last half of May, $11,000.
16. Received cash from sale of May 6, less return of May 14 and discount.
19. Purchased merchandise for cash, $18,700.
19. Paid $33,450 to Buttons Co. on account, no discount.
Record the following transactions on Page 21 of the journal.
20. Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the merchandise 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, no discount.
21. Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
24. Returned $5,000 of damaged merchandise purchased on May 21, receiving credit from the seller.
May 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 merchandise sold was $47,000.
30. Received cash from sale of May 20, less discount, plus freight paid on May 21.
31. Paid for purchase of May 21, less return of May 24 and discount.

Instructions
1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (œ“) in the Posting Reference column. Journalize the transactions for July, starting on Page 20 of the journal.
2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
3. Prepare an unadjusted trial balance.
4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

5. (Optional.) Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a retained earnings statement, and a balance sheet.
9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. 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.
10. Prepare a post-closing trialbalance.

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110 Cash 112 Accounts Receivable 115 Merchandise Inventory 116 Prepaid Insurance 117 Store Supplies 123 Store Equipment 124 Accumulated Depreciation-Store Equipment 210 Accounts Payable 211 Salaries Payable 310 Capital Stock 3 Retained Earnings 312 Dividends 313 Income Summary 410 Sales 411 Sales Returns and Allowances 412 Sales Discounts 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense 523 Store Supplies Expense 529 Miscellaneous Selling Expense 530 Office Salaries Expense 531 ent Expense 532 Insurance Expense 539 Miscellaneous Administrative Expense $83,600 233,900 602,400 16,800 11,400 569,500 56,700 96,600 100,000 585,300 135,000 5,221,100 92,700 59,400 2,823,000 664,800 281,000 12,600 382,100 83,700 7,800 a. Merchandise inventory on May 31 b. Insurance expired during the year C. Store supplies on hand on May 31 d. Depreciation for the current year e. Accrued salaries on May 31: $550,000 12,000 4,000 14,000 Sales salaries Office salaries $7,000 6,600 13,600