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: 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 135,000 410 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: 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: 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 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. Instructions Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balancein the item section, and place a check mark (✓) in the Posting Reference column. Journalize the transactions for May, starting on Page 20 of the journal. 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. Prepare an unadjusted trial balance.

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: 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 135,000 410 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: 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: 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 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. Instructions Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balancein the item section, and place a check mark (✓) in the Posting Reference column. Journalize the transactions for May, starting on Page 20 of the journal. 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. Prepare an unadjusted trial balance.

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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Question

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:

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
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:

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:

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 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.

Instructions

Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balancein the item section, and place a check mark (✓) in the Posting Reference column. Journalize the transactions for May, starting on Page 20 of the journal.
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.
Prepare an unadjusted trial balance.

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