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: During May, the last month of the fiscal year, the following transactions were completed: Record the following transactions on Page 21 of the journal: Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in 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. 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. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). 5. (Optional) Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of stockholders’ equity, and a balance sheet. Assume that additional common stock of $10,000 was issued in January 20Y6. 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the retained earnings account. 10. Prepare a post-closing trial balance.

General ledger: General ledger is a record of all accounts of assets, liabilities, and stockholders’ equity, necessary to prepare financial statements.

Cash Account:

Cash Account						Account No. 110
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓			83,600
	1		20		5,000
	4		20		600
	7		20	22,300
	10		20	54,000
	13		20		35,280
	15		20		11,000
	16		20	67,130
	19		20		18,700
	19		20		33,450
	20		20		13,230
	21		21		2,300
	21		21	42,900
	26		21		7,500
	28		21		85,000
	29		21		2,400
	30		21	111,200
	31		21		82,170	84,500

Table (1)

Accounts Receivable Account:

Accounts Receivable						Account No. 112
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓			233,900
	6		20	67,130
	7		20		22,300
	16		20		67,130
	20		21	108,900
	21		21	2,300
	21		21		42,900
	30		21	77,175
	30		21		111,200	245,875

Table (2)

Inventory Account:

Inventory						Account No. 115
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓			624,400
	3		20	35,280
	4		20	600
	6		20		41,000
	10		20		32,000
	19		20	18,700
	20		20	8,000
	20		21		70,000
	21		21	87,120
	24		21		4,950
	26		21	4,800
	30		21		47,000	583,950
	31	Adjusting	22		13,950	570,000

Table (3)

Estimated Returns Inventory Account:

Estimated Returns Inventory						Account No. 116
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓			28,000
	20		20		8,000
	26		21		4,800	15,200
	31	Adjusting	22	35,000		50,200

Table (4)

Prepaid Insurance Account:

Prepaid Insurance						Account No. 117
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓			16,800
	31	Adjusting	22		12,000	4,800

Table (5)

Store Supplies Account:

Store Supplies						Account No. 118
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓			11,400
	29		21	2,400		13,800
	31	Adjusting	22		9,800	4,000

Table (6)

Store Equipment Account:

Store Equipment						Account No. 123
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
						Debit	Credit
20Y6
May	1	Balance	✓			569,500

Table (7)

Accumulated Depreciation – Store Equipment Account:

Accumulated Depreciation – Store Equipment						Account No. 124
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓				56,700
	31	Adjusting	22		14,000		70,700

Table (8)

Accounts Payable Account:

Accounts Payable						Account No. 210
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓				96,600
	3		20		35,280
	13		20	35,280
	19		20	33,450
	21		21		87,120
	24		21	4,950
	31		21	82,170			63,150

Table (9)

Salaries Payable Account:

Salaries Payable						Account No. 211
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
						Debit	Credit
20Y6
May	31	Adjusting	22		13,600		13,600

Table (10)

Customers Refunds Payable Account:

Customers Refunds Payable						Account No. 212
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
Date		Item	Post. Ref.	Debit	Credit	Debit	Credit
20Y6
May	1	Balance	✓				50,000
	20		20	13,230
	26		21	7,500			29,270
	31	Adjusting	22		60,000		89,270

Table (11)

Common Stock Account:

Common Stock						Account No. 310
Date		Item	Post. Ref.	Debit	Credit	Balance ($)
						Debit	Credit
20Y6
May	1	Balance	✓				100,000

Table (12)

Retained Earnings Account:

Retained Earnings

Account No...

Answer 6

1. and 2.

To determine

Record the journal entries.

Answer 7

3.

To determine

Prepare the unadjusted trial balance of Company P.

Answer 8

4. and 6.

To determine

Record the adjusting entry.

Answer 9

7.

To determine

Prepare the adjusted trial balance of Company P.

Answer 10

8.

To determine

Prepare the income statement, retained earnings, and balance sheet of P Company.

Answer 11

9.

To determine

Post the closing entries.

Answer 12

10.

To determine

Prepare the post-closing trial balance.

Answer 13

5.

To determine

Prepare the worksheet for Company P.

Financial And Managerial Accounting

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Financial And Managerial Accounting

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