Could you check if my journal entries for this information is correct? Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2019 (unless otherwise indicated), are as follows: 110 Cash $83,600 112 Accounts Receivable 233,900 115 Merchandise Inventory 624,400 116 Estimated Returns Inventory 28,000 117 Prepaid Insurance 16,800 118 Store Supplies 11,400 123 Store Equipment 569,500 124 Accumulated Depreciation—Store Equipment 56,700 210 Accounts Payable 96,600 211 Customer Refunds Payable 50,000 212 Salaries Payable — 310 Lynn Tolley, Capital, June 1, 2018 685,300 311 Lynn Tolley, Drawing 135,000 410 Sales 5,069,000 510 Cost of Merchandise Sold 2,823,000 520 Sales Salaries Expense 664,800 521 Advertising Expense 281,000 522 Depreciation Expense — 523 Store Supplies Expense — 529 Miscellaneous Selling Expense 12,600 530 Office Salaries Expense 382,100 531 Rent Expense 83,700 532 Insurance Expense — 539 Miscellaneous Administrative Expense 7,800 May 1: Paid rent for May, $5,000. Description Debit Credit Rent Expense 5000 Cash 5000 May 3: Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000. Description Debit Credit Merchandise Inventory 35280 Accounts Payable-Martin Co. 35280 May 4: Paid freight on purchase of May 3, $600. Description Debit Credit Merchandise Inventory 600 Cash 600 May 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. Description Debit Credit Accounts Receivable-Korman Co. 68500 Sales 68500 Cost of Merchandise Sold 41000 Merchandise Inventory 41000 May 7: Received $22,300 cash from Halstad Co. on account. Description Debit Credit Cash 22500 Accounts Receivable-Halstad Co. 22500 May 10: Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000. Description Debit Credit Cash 54000 Sales 54000 Cost of Merchandise Sold 32000 Merchandise Inventory 32000 May 13: Paid for merchandise purchased on May 3. Description Debit Credit Accounts Payable-Martin Co. 35280 Cash 35280 May 15: Paid advertising expense for last half of May, $11,000. Description debit Credit Advertising Expense 11000 Cash 11000 May 16: Received cash from sale of May 6. Description Debit Credit Cash 67130 Accounts Receivable-Korman Co. 67130 May 19: Purchased merchandise for cash, $18,700. Description Debit Credit Merchandise Inventory 18700 Cash 18700 May 19: Paid $33,450 to Buttons Co. on account. Description Debit Credit Accounts Payable-Buttons Co. 33450 Cash 33450 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. Description Debit Credit Customers Refunds Payable 13230 Cash 13230 Merchandise Inventory 8000 Estimated Returns Inventory 8000 May 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. Description Debit Credit Accounts Receivable-Crescent Co. 108900 Sales 108900 Cost of Merchandise Sold 70000 Merchandise Inventory 70000 May 21: For the convenience of Crescent Co., paid freight on sale of May 20, $2,300. Description Debit Credit Accounts Receivable-Crescent Co. 2300 Cash 2300 May 21: Received $42,900 cash from Gee Co. on account. Description Debit Credit Cash 42900 Accounts Receivable-Gee Co. 42900 May 21: Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000. Description Debit Credit Merchandise Inventory 87120 Accounts Receivable-Osterman Co. 87120 May 24: Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. Description Debit Credit Accounts Payable-Osterman Co. 4950 Merchandise Inventory 4950 May 26: Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800. Description Debit Credit Customers Refunds Payable 7500 Cash 7500 Merchandise Inventory 4800 Estimated Returns Inventory 4800 May 28: Paid sales salaries of $56,000 and office salaries of $29,000. Description Debit Credit Sales Salaries Expense 56000 Office Salaries Expense 29000 Cash 85000 May 29: Purchased store supplies for cash, $2,400. Description Debit Credit Store Supplies 2400 Cash 2400 May 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. Description Debit Credit Accounts Receivable-Turner Co. 77175 Sales 77175 Cost of Merchandise Sold 47000 Merchandise Inventory 47000 May 30: Received cash from sale of May 20 plus freight paid on May 21. Description Debit Credit Cash 111200 Accounts Receivable-Crescent Co. 111200 May 31: Paid for purchase of May 21, less return of May 24. Description Debit Credit Accounts Payable-Osterman Co. 82170 Cash 82170
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Could you check if my
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2019 (unless otherwise indicated), are as follows:
| 110 | Cash | $83,600 |
| 112 | 233,900 | |
| 115 | Merchandise Inventory | 624,400 |
| 116 | Estimated Returns Inventory | 28,000 |
| 117 | Prepaid Insurance | 16,800 |
| 118 | Store Supplies | 11,400 |
| 123 | Store Equipment | 569,500 |
| 124 | Accumulated |
56,700 |
| 210 | Accounts Payable | 96,600 |
| 211 | Customer Refunds Payable | 50,000 |
| 212 | Salaries Payable | — |
| 310 | Lynn Tolley, Capital, June 1, 2018 | 685,300 |
| 311 | Lynn Tolley, Drawing | 135,000 |
| 410 | Sales | 5,069,000 |
| 510 | Cost of Merchandise Sold | 2,823,000 |
| 520 | Sales Salaries Expense | 664,800 |
| 521 | Advertising Expense | 281,000 |
| 522 | Depreciation Expense | — |
| 523 | Store Supplies Expense | — |
| 529 | Miscellaneous Selling Expense | 12,600 |
| 530 | Office Salaries Expense | 382,100 |
| 531 | Rent Expense | 83,700 |
| 532 | Insurance Expense | — |
| 539 | Miscellaneous Administrative Expense | 7,800 |
May 1: Paid rent for May, $5,000.
|
Description |
|
Debit |
Credit |
|
Rent Expense |
5000 |
|
|
|
Cash |
|
5000 |
May 3: Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
|
Description |
|
Debit |
Credit |
|
Merchandise Inventory |
35280 |
|
|
|
Accounts Payable-Martin Co. |
|
35280 |
May 4: Paid freight on purchase of May 3, $600.
|
Description |
|
Debit |
Credit |
|
Merchandise Inventory |
600 |
|
|
|
Cash |
|
600 |
May 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.
|
Description |
|
Debit |
Credit |
|
Accounts Receivable-Korman Co. |
68500 |
|
|
|
Sales |
|
68500 |
|
|
Cost of Merchandise Sold |
41000 |
|
|
|
Merchandise Inventory |
|
41000 |
May 7: Received $22,300 cash from Halstad Co. on account.
|
Description |
|
Debit |
Credit |
|
Cash |
22500 |
|
|
|
Accounts Receivable-Halstad Co. |
|
22500 |
May 10: Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.
|
Description |
|
Debit |
Credit |
|
Cash |
54000 |
|
|
|
Sales |
|
54000 |
|
|
Cost of Merchandise Sold |
32000 |
|
|
|
Merchandise Inventory |
|
32000 |
May 13: Paid for merchandise purchased on May 3.
|
Description |
|
Debit |
Credit |
|
Accounts Payable-Martin Co. |
35280 |
||
|
Cash |
35280 |
May 15: Paid advertising expense for last half of May, $11,000.
|
Description |
debit |
Credit |
|
|
Advertising Expense |
11000 |
|
|
|
Cash |
|
11000 |
May 16: Received cash from sale of May 6.
|
Description |
|
Debit |
Credit |
|
Cash |
67130 |
||
|
Accounts Receivable-Korman Co. |
67130 |
May 19: Purchased merchandise for cash, $18,700.
|
Description |
|
Debit |
Credit |
|
Merchandise Inventory |
18700 |
|
|
|
Cash |
|
18700 |
May 19: Paid $33,450 to Buttons Co. on account.
|
Description |
|
Debit |
Credit |
|
Accounts Payable-Buttons Co. |
33450 |
|
|
|
Cash |
|
33450 |
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.
|
Description |
|
Debit |
Credit |
|
Customers Refunds Payable |
13230 |
|
|
|
Cash |
|
13230 |
|
|
Merchandise Inventory |
8000 |
|
|
|
Estimated Returns Inventory |
|
8000 |
May 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.
|
Description |
|
Debit |
Credit |
|
Accounts Receivable-Crescent Co. |
108900 |
|
|
|
Sales |
|
108900 |
|
|
Cost of Merchandise Sold |
70000 |
|
|
|
Merchandise Inventory |
|
70000 |
May 21: For the convenience of Crescent Co., paid freight on sale of May 20, $2,300.
|
Description |
|
Debit |
Credit |
|
Accounts Receivable-Crescent Co. |
2300 |
|
|
|
Cash |
|
2300 |
May 21: Received $42,900 cash from Gee Co. on account.
|
Description |
|
Debit |
Credit |
|
Cash |
42900 |
|
|
|
Accounts Receivable-Gee Co. |
|
42900 |
May 21: Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
|
Description |
|
Debit |
Credit |
|
Merchandise Inventory |
87120 |
|
|
|
Accounts Receivable-Osterman Co. |
|
87120 |
May 24: Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
|
Description |
|
Debit |
Credit |
|
Accounts Payable-Osterman Co. |
4950 |
|
|
|
Merchandise Inventory |
|
4950 |
May 26: Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800.
|
Description |
|
Debit |
Credit |
|
Customers Refunds Payable |
7500 |
|
|
|
Cash |
|
7500 |
|
|
Merchandise Inventory |
4800 |
|
|
|
Estimated Returns Inventory |
|
4800 |
May 28: Paid sales salaries of $56,000 and office salaries of $29,000.
|
Description |
|
Debit |
Credit |
|
Sales Salaries Expense |
56000 |
||
|
Office Salaries Expense |
29000 |
||
|
Cash |
85000 |
May 29: Purchased store supplies for cash, $2,400.
|
Description |
|
Debit |
Credit |
|
Store Supplies |
2400 |
|
|
|
Cash |
|
2400 |
May 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.
|
Description |
|
Debit |
Credit |
|
Accounts Receivable-Turner Co. |
77175 |
|
|
|
Sales |
|
77175 |
|
|
Cost of Merchandise Sold |
47000 |
|
|
|
Merchandise Inventory |
|
47000 |
May 30: Received cash from sale of May 20 plus freight paid on May 21.
|
Description |
|
Debit |
Credit |
|
Cash |
111200 |
||
|
Accounts Receivable-Crescent Co. |
111200 |
May 31: Paid for purchase of May 21, less return of May 24.
|
Description |
|
Debit |
Credit |
|
Accounts Payable-Osterman Co. |
82170 |
||
|
Cash |
82170 |
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Why is the credit memo only for 4950 when it is stated as 5000
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