Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 20Y6 (unless otherwise indicated), are as follows. Assume all accounts have normal balances. 110 Cash$83,600 312 Dividends$135,000
112 Accounts Receivable233,900 410 Sales5,069,000
115 Inventory624,400 510 Cost of Goods Sold2,823,000
116 Estimated Returns Inventory28,000 520 Sales Salaries Expense664,800
117 Prepaid Insurance16,800 521 Advertising Expense281,000
118 Store Supplies11,400 522 Depreciation Expense—
123 Store Equipment569,500 523 Store Supplies Expense—
124 Accumulated Depreciation—Store Equipment56,700 529 Miscellaneous Selling Expense12,600
210 Accounts Payable96,600 530 Office Salaries Expense382,100
211 Salaries Payable— 531 Rent Expense83,700
212 Customers Refunds Payable50,000 532 Insurance Expense—
310 Common Stock100,000 539 Miscellaneous Administrative Expense7,800
311 Retained Earnings585,300 539
Part 1: Journalize the transactions below for May, the last month of the fiscal year. If an amount box does not require an entry, leave it blank.
May 1: Paid rent for May, $5,000.
DateDescriptionPost. Ref. DebitCredit
May 1
May 3: Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
DateDescriptionPost. Ref. DebitCredit
May 3
May 4: Paid freight on purchase of May 3, $600.
DateDescriptionPost. Ref. DebitCredit
May 4
May 6: Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the goods sold was $41,000.
DateDescriptionPost. Ref. DebitCredit
May 6-Sales
May 6-Cost
May 7: Received $22,300 cash from Halstad Co. on account.
DateDescriptionPost. Ref. DebitCredit
May 7
May 10: Sold merchandise for cash, $54,000. The cost of the goods sold was $32,000.
DateDescriptionPost. Ref. DebitCredit
May 10-Sales
May 10-Cost
May 13: Paid for merchandise purchased on May 3.
DateDescriptionPost. Ref. DebitCredit
May 13
May 15: Paid advertising expense for last half of May, $11,000.
DateDescriptionPost. Ref. DebitCredit
May 15
May 16: Received cash from sale of May 6.
DateDescriptionPost. Ref. DebitCredit
May 16
May 19: Purchased merchandise for cash, $18,700.
DateDescriptionPost. Ref. DebitCredit
May 19
May 19: Paid $33,450 to Buttons Co. on account.
DateDescriptionPost. Ref. DebitCredit
May 19
May 20: Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000.
DateDescriptionPost. Ref. DebitCredit
May 20-Refund
May 20-Cost
May 20: Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the goods sold was $70,000.
DateDescriptionPost. Ref. DebitCredit
May 20-Sales
May 20-Cost
May 21: For the convenience of Crescent Co., paid freight on sale of May 20, $2,300.
DateDescriptionPost. Ref. DebitCredit
May 21
May 21: Received $42,900 cash from Gee Co. on account.
DateDescriptionPost. Ref. DebitCredit
May 21
May 21: Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
DateDescriptionPost. Ref. DebitCredit
May 21
May 24: Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
DateDescriptionPost. Ref. DebitCredit
May 24
May 26: Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800.
DateDescriptionPost. Ref. DebitCredit
May 26-Refund
May 26-Cost
May 28: Paid sales salaries of $56,000 and office salaries of $29,000.
DateDescriptionPost. Ref. DebitCredit
May 28
May 29: Purchased store supplies for cash, $2,400.
DateDescriptionPost. Ref. DebitCredit
May 29
May 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.
DateDescriptionPost. Ref. DebitCredit
May 30-Sales
May 30-Cost
May 30: Received cash from sale of May 20 plus freight paid on May 21.
DateDescriptionPost. Ref. DebitCredit
May 30
May 31: Paid for purchase of May 21, less return of May 24.
DateDescriptionPost. Ref. DebitCredit
May 31
Part 2: Using the attached spreadsheet, post the journal entries from Part 1 to the general ledger. Extend 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.