chapter 5 comprehensive problem 2

ensive Problem 2 comprehen Niet income $741.855 net method Dalis de Creek Co. is a retail business that uses the perpetual inventory system. The account balances Palisade Creek as of May 1, 20Y6 (unless otherwise indicated), are as follows: 110 Cash $ 83,600 312 Dividends 112 Accounts Receivable 233,900 $ 135,000 410 Sales 115 Inventory 5,069,000 624,400 510 Cost of Goods Sold 116 Estimated Returns Inventory 2,823,000 28,000 520 Sales Salaries Expense 664,800 117 Prepaid Insurance 16,800 521 Advertising Expense 281,000 118 Store Supplies 11,400 522 Depreciation Expense 123 Store Equipment 569,500 523 Store Supplies Expense 124 Accumulated Depreciation 529 Miscellaneous Selling Expense 12,600 Store Equipment 56,700 530 Office Salaries Expense 382,100 210 Accounts Payable 96,600 531 Rent Expense 83,700 211 Salaries Payable 532 Insurance Expense 212 Customers Refunds Payable 50,000 539 Miscellaneous Administrative 310 Common Stock 100,000 Expense 7,800 311 Retained Earnings 585,300 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. (Continued) 282 Chapter 6. The invoice amo e point. $110.000. Theo Accounting for Retal Businesses May Paid freight on purchase of May 3, 5600 Sold merchandise account to Roman Co, terms 2/10,30, FOPP9 POSTS goods sold was 541.000. 7 Received $22.300 cash from Halstad Co on account Sold merchandise forcat 554.000. The cost of the goods sold was 32.000 13. Paid for merchandise purchased on May 15. Paid advertising expense for last half of May. 511.000 16. Received cash from sale of May 6. 19. Purchased merchandise for cash. 518,700. 19. Paid $31.450 to Buttons Co, on account 20 Paid Korman Co a cash refund of $13.230 for returned merchandise from sale of May 6. The in of the returned merchandise was $13.500 and the cost of the returned merchandise was $8.00 Kecond the following transactions on Page 21 of the journal May 20. Sold merchandise on account to Crescent Co, terms 1/10, 130, FOB shipping point, 5110,000. 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, 1/30, FOB destination, Sea 24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for me 26. Refunded cash on sales made for cash. 57.500. The cost of the merchandise returned was 54,800 28. Pald 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. 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 c ar in the Posting Reference column. Journalize the transactions for May, starting at the journal 2. Post the journal to the general ledger, extending the balances to the appropriate bal ance columns after all posting is completed. In this are not required to update of post to the accounts receivable and accounts payable su o dgers. 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). a. Inventory on May 31 $570,000 b. Insurance expired during the year 12.000 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 13,600 The adjustment for customer returns and allowance is $60,000 for sales and 535.000 for cost of goods sold. 5. (Optional) Enter the unadjusted trial balance on a 10-columnend ofered spreadsheet sheet), and complete the spreadsheet. 6. Journaline and post the adjusting entries. Record the adjusting entries on Page 22 of the 7. Prepare an adjusted trial balance. Prepare an income statement, a statement of stockholders equity and balance sheet that additional common stock of $10,000 was issued in January 2016 9. Prepare and post the closing entries. Record the closing entries par 23 of the Indite closed accounts by inserting a line in both the balance column opposite the entry Insert the new balance in the retained earnings account 10. Prepare a post-closing trial balance nce sheet. As entries Tained caboth the ge 23 of the or opposite the one