Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2018, are as follows: Assume all accounts have normal balances. 110 Cash $ 83,600 112 Accounts receivable 233,900 115 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 Salaries payable — 212 Customers refunds payable 50,000 310 Common stock 100,000 311 Retained earnings 585,300 312 Dividends 135,000 313 Income summary — 410 Sales 5,069,000 510 Cost of goods 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 During May, the last month of the fiscal year, the following transactions were completed: Record the following transactions on page 20 of the journal. Refer to the Chart of Accounts for exact wording of account titles. 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 goods sold was $41,000. 7 Received $22,300 cash from Halstad Co. on account. 10 Sold merchandise for cash, $54,000. The cost of the goods sold was $32,000. 13 Paid for merchandise purchased on May 3. 15 Paid advertising expense for last half of May, $11,000. 16 Received cash from sale of May 6. 19 Purchased merchandise for cash, $18,700. 19 Paid $33,450 to Buttons Co. on account. 20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000. Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles. 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. 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, n/30, FOB destination, $88,000. 24 Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. 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 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. Required: 1. Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the May transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. A. Enter the May 1 balances of each of the accounts in the appropriate balance column of a four-column account. Enter May 1 in the date column. Write Balance in the item section, and enter ‘X” in the Posting Reference column. B. Journalize the transactions for May, 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. Accounts with zero balances can be left blank. 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 C. 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 Total accrued salaries: $13,600 F. The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold. 5. (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. A. Journalize the adjusting entries. Record the adjusting entries on Page 22 of the journal.* B. Post the adjusting entries. 7. Prepare an adjusted trial balance. Accounts with zero balances can be left blank. * Refer to the Chart of Accounts for exact wording of account titles.
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2018, are as follows: Assume all accounts have normal balances. 110 Cash $ 83,600 112 Accounts receivable 233,900 115 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 Salaries payable — 212 Customers refunds payable 50,000 310 Common stock 100,000 311 Retained earnings 585,300 312 Dividends 135,000 313 Income summary — 410 Sales 5,069,000 510 Cost of goods 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 During May, the last month of the fiscal year, the following transactions were completed: Record the following transactions on page 20 of the journal. Refer to the Chart of Accounts for exact wording of account titles. 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 goods sold was $41,000. 7 Received $22,300 cash from Halstad Co. on account. 10 Sold merchandise for cash, $54,000. The cost of the goods sold was $32,000. 13 Paid for merchandise purchased on May 3. 15 Paid advertising expense for last half of May, $11,000. 16 Received cash from sale of May 6. 19 Purchased merchandise for cash, $18,700. 19 Paid $33,450 to Buttons Co. on account. 20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000. Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles. 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. 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, n/30, FOB destination, $88,000. 24 Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. 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 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. Required: 1. Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the May transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. A. Enter the May 1 balances of each of the accounts in the appropriate balance column of a four-column account. Enter May 1 in the date column. Write Balance in the item section, and enter ‘X” in the Posting Reference column. B. Journalize the transactions for May, 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. Accounts with zero balances can be left blank. 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 C. 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 Total accrued salaries: $13,600 F. The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of goods sold. 5. (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. A. Journalize the adjusting entries. Record the adjusting entries on Page 22 of the journal.* B. Post the adjusting entries. 7. Prepare an adjusted trial balance. Accounts with zero balances can be left blank. * Refer to the Chart of Accounts for exact wording of account titles.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 37E: Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following...
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The Effect Of Prepaid Taxes On Assets And Liabilities
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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.
Question
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Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2018, are as follows: Assume all accounts have normal balances.
| 110 | Cash | $ 83,600 |
| 112 | 233,900 | |
| 115 | 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 | 56,700 | |
| 210 | Accounts payable | 96,600 |
| 211 | Salaries payable | — |
| 212 | Customers refunds payable | 50,000 |
| 310 | Common stock | 100,000 |
| 311 | 585,300 | |
| 312 | Dividends | 135,000 |
| 313 | Income summary | — |
| 410 | Sales | 5,069,000 |
| 510 | Cost of goods 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 |
During May, the last month of the fiscal year, the following transactions were completed:
Record the following transactions on page 20 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
| 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 goods sold was $41,000. | |
| 7 | Received $22,300 cash from Halstad Co. on account. | |
| 10 | Sold merchandise for cash, $54,000. The cost of the goods sold was $32,000. | |
| 13 | Paid for merchandise purchased on May 3. | |
| 15 | Paid advertising expense for last half of May, $11,000. | |
| 16 | Received cash from sale of May 6. | |
| 19 | Purchased merchandise for cash, $18,700. | |
| 19 | Paid $33,450 to Buttons Co. on account. | |
| 20 | Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000. |
Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
| 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. |
| 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, n/30, FOB destination, $88,000. | |
| 24 | Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. | |
| 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 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. |
| Required: | |||||||||||||||||||
| 1. | Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the May transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem.
|
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| 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 |
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| 4. | At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).
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| 5. | (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. | ||||||||||||||||||
| 6. |
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| 7. | Prepare an adjusted trial balance. Accounts with zero balances can be left blank.
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