Palisade Creek Co. is a merchandising business that uses the perpetual inventory
ID: 2596167 • Letter: P
Question
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2016 (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 20 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
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 Salaries Payable — 212 Customers Refunds Payable 50,000 310 Lynn Tolley, Capital, June 1, 2015 685,300 311 Lynn Tolley, Drawing 135,000 312 Income Summary — 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 7,800Explanation / Answer
Part 2 Date Description Debit Credit May 1, 2016 Rent Expenses $5,000 Cash $5,000 May 3, 2016 Merchandise Inventory ($36,000 x (1-2%) $35,280 Accounts Payable—Martin Co. $35,280 May 4, 2016 Merchandise Inventory $600 Cash $600 May 6, 2016 Accounts Receivable—Korman Co. $67,130 Sales ($68,500 x (1-2%) $67,130 May 6, 2016 Cost of Merchandise Sold $41,000 Merchandise Inventory $41,000 May 7, 2016 Cash $22,300 Accounts Receivable—Halstad Co. $22,300 May 10, 2016 Cash $54,000 Sales $54,000 May 10, 2016 Cost of Merchandise Sold $32,000 Merchandise Inventory $32,000 May 13, 2016 Accounts Payable—Martin Co. $35,280 Cash $35,280 May 15, 2016 Advertising Expense $11,000 Cash $11,000 May 16, 2016 Cash $67,130 Accounts Receivable—Korman Co. $67,130 May 19, 2016 Merchandise Inventory $18,700 Cash $18,700 May 19, 2016 Accounts Payable—Buttons Co. $33,450 Cash $33,450 May 20, 2016 Customers Refunds Payable $13,230 Cash $13,230 May 20, 2016 Accounts Receivable—Cresent Co. $108,900 Sales ($110,000 x (1-1%) $108,900 May 20, 2016 Cost of Merchandise Sold $70,000 Customers Refunds Payable $70,000 May 21, 2016 Accounts Receivable—Cresent Co. $2,300 Cash $2,300 May 21, 2016 Cash $42,900 Accounts Receivable—Gee Co. $42,900 May 21, 2016 Merchandise Inventory ($88000 x (1-1%) $87,120 Accounts Payable—Osterman Co. $87,120 May 24, 2016 Accounts Payable—Osterman Co. $4,950 Merchandise Inventory $4,950 May 26, 2016 Customers Refunds Payable $7,500 Cash $7,500 Merchandise Inventory $4,800 Estimated Returns Inventory $4,800 May 26, 2016 Sales Salaries Expense $56,000 Office Salaries Expense $29,000 Cash $85,000 May 29, 2016 Store Supplies $2,400 Cash $2,400 May 30, 2016 Accounts Receivable—Turner Co. $77,175 Sales ($78750 x (1-2%) $77,175 Cost of Merchandise Sold $47,000 Store Supplies $47,000 May 30, 2016 Cash $111,200 Accounts Receivable—Crescent Co. $111,200 May 31, 2016 Accounts Payable—Osterman Co $82,170 Cash ($87,120 – $4,950) $82,170
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