Comprehensive Problem $2$

Part $8$:

You must complete parts $1,2,3,4,6$ and $7$ before attempting to complete part $8.$

Note:$$Part $5$ is the optional worksheet.

$$

$1.$Prepare a multiple$-$step income statement.

$2.$Prepare a statement of owner's equity.

$3.$Prepare a balance sheet. $4.$ At the end of May, the following adjustment data were assembled: Analyze and use these data to complete Par

a$.$ Merchandise inventory on May $\backslash (31\backslash$quad $\backslash$$ $585,200\backslash )$

b$.$ Insurance expired during the year $12,000$

c$.$ Store supplies on hand on May $\backslash (31\backslash$quad $4,000\backslash )$

d$.$ Depreciation for the current year $14,000$

e$.$ Accrued salaries on May $31$:

f$.$ The adjustment for customer refunds and allowances is $\backslash$$$60,000.$

g$.$ Since Palisade Creek does not accept merchandise returns, no adjustment is necessary for estimated inventory returns.

$6.$ Journalize the adjusting entries. If an amount box does not require an entry, leave it blank. Post the adjusting entries to the attached spreadsheet you used in parts $1$ and $2.$ Comprehensive Problem $2$

Part $8$:

You must complete parts $\backslash (1,2,3,4,6\backslash )$ and $7$ before attempting to complete part $8.$

Note: Part $5$ is the optional worksheet.

$1.$ Prepare a multiple$-$step income statement.

Palisade Creek Co$.$

Income Statement

For the Year Ended May $31,20$ Y $7$ Total selling expenses

$2.$ Prepare a statement of owner's equity.

Palisade Creek Co$.$

Statement of Owner's Equity

For the Year Ended May $31,\backslash (20$ Y $7\backslash )$

Assets

Current assets:

Cash

Accounts receivable

Inventory

Prepaid insurance

Store supplies

Total current assets

Property, plant, and equipment:

Store equipment

Accumulated depreciation

Total property, plant, and equipment

Total assets

$\backslash$$

$4,800$

$4,000$