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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.

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 5, Problem 1COMP
Textbook Problem
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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:

Chapter 5, Problem 1COMP, Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account , example  1

During May, the last month of the fiscal year, the following transactions were completed:

Chapter 5, Problem 1COMP, Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account , example  2

Chapter 5, Problem 1COMP, Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account , example  3

Record the following transactions on Page 21 of the journal:

Chapter 5, Problem 1COMP, Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account , example  4

Instructions

  1. 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. 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. 3. Prepare an unadjusted trial balance.
  4. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

Chapter 5, Problem 1COMP, Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account , example  5

  1. 5. (Optional) Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
  2. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal.
  3. 7. Prepare an adjusted trial balance.
  4. 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.
  5. 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.
  6. 10. Prepare a post-closing trial balance.

1, 2, 6, and 9

To determine

Post the balance of each of the accounts.

Explanation of Solution

Enter the balances of each of the accounts.

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

Cash Account:

Cash AccountAccount No. 110
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6      
May1Balance✓    83,600 
 1 20 5,000  
 4 20 600  
 7 2022,300   
 10 2054,000   
 13 20 35,280  
 15 20 11,000  
 16 2067,130   
 19 20 18,700  
 19 20 33,450  
 20 20 13,230  
 21 21 2,300  
 21 2142,900   
 26 21 7,500  
 28 21 85,000  
 29 21 2,400  
 30 21111,200   
 31 21 82,17084,500 

Table (1)

Accounts Receivable Account:

Accounts ReceivableAccount No. 112
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓    233,900 
 6 2067,130   
 7 20 22,300  
 16 20 67,130  
 20 21108,900   
 21 212,300   
 21 21 42,900  
 30 2177,175   
 30 21 111,200245,875 

Table (2)

Inventory Account:

InventoryAccount No. 115
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓    624,400 
 3 2035,280   
 4 20600   
 6 20 41,000  
 10 20 32,000  
 19 2018,700   
 20 208,000   
 20 21 70,000  
 21 2187,120   
 24 21 4,950  
 26 214,800   
 30 21 47,000583,950 
 31Adjusting22 13,950570,000 

Table (3)

Estimated Returns Inventory Account:

Estimated Returns InventoryAccount No. 116
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓    28,000 
 20 20 8,000  
 26 21 4,80015,200 
 31Adjusting2235,000 50,200 

Table (4)

Prepaid Insurance Account:

Prepaid InsuranceAccount No. 117
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓    16,800 
 31Adjusting22 12,0004,800 

Table (5)

Store Supplies Account:

Store SuppliesAccount No. 118
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓    11,400 
 29 212,400 13,800 
 31Adjusting22 9,8004,000 

Table (6)

Store Equipment Account:

Store EquipmentAccount No. 123
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓    569,500 

Table (7)

Accumulated Depreciation – Store Equipment Account:

Accumulated Depreciation – Store EquipmentAccount No. 124
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓     56,700
 31Adjusting22 14,000 70,700

Table (8)

Accounts Payable Account:

Accounts PayableAccount No. 210
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓     96,600
 3 20 35,280  
 13 2035,280   
 19 2033,450   
 21 21 87,120  
 24 214,950   
 31 2182,170  63,150

Table (9)

Salaries Payable Account:

Salaries PayableAccount No. 211
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May31Adjusting22 13,600 13,600

Table (10)

Customers Refunds Payable Account:

Customers Refunds PayableAccount No. 212
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓     50,000
 20 2013,230   
 26 217,500  29,270
 31Adjusting22 60,000 89,270

Table (11)

Common Stock Account:

Common StockAccount No. 310
DateItem

Post.

Ref.

DebitCreditBalance ($)
DebitCredit
20Y6       
May1Balance✓     100,000

Table (12)

Retained Earnings Account:

Retained EarningsAccount No...

1. and 2.

To determine

Record the journal entries.

3.

To determine

Prepare the unadjusted trial balance of Company P.

4. and 6.

To determine

Record the adjusting entry.

7.

To determine

Prepare the adjusted trial balance of Company P.

8.

To determine

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

9.

To determine

Post the closing entries.

10.

To determine

Prepare the post-closing trial balance.

5.

To determine

Prepare the worksheet for Company P.

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Financial And Managerial Accounting
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