PART 8 PARQADISE CREEK CO Prepare the closing entries. Record the closing entrie
ID: 2447339 • Letter: P
Question
PART 8 PARQADISE CREEK CO
Prepare the closing entries. Record the closing entries on Page 23 of the journal.
The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of merchandise sold.
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:
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 7,800
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 merchandise 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 merchandise 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.
May 20 Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the merchandise 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 merchandise 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.
Merchandise inventory on May 31, $570,000 • Insurance expired during the year, $12,000 • Store supplies on hand on May 31, $4,000 • Depreciation for the current year, $14,000 • Accrued salaries on May 31: Sales salaries, $7,000 Office salaries, $6,600 Total accrued salaries: $13,600 •The adjustment for customer returns and allowances is $60,000 for sales and $35,000 for cost of merchandise sold.
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:
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 7,800
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 merchandise 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 merchandise 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.
May 20 Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the merchandise 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 merchandise 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.
Explanation / Answer
Ans
Date Account head Debit Credit 01-May Rent Expenses 5,000.00 Cash 5,000.00 03-May Merchandise Inventory 36,000.00 Accounts Payable 36,000.00 (Gross method of accounting Purchase) 04-May Merchandise Inventory 600.00 Cash 600.00 06-May Accounts Receivable 68,500.00 Sales 68,500.00 06-May Cost of Merchandise sold 41,000.00 Merchandise Inventory 41,000.00 07-May Cash 22,300.00 Accounts Receivable 22,300.00 10-May Cash 54,000.00 Sales 54,000.00 10-May Cost of Merchandise sold 32,000.00 Merchandise Inventory 32,000.00 13-May Accounts Payable 36,000.00 Cash 35,280.00 Cash discount received 720.00 15-May Advertising Expense 11,000.00 Cash 11,000.00 16-May Cash 67,130.00 Cash discount 1,370.00 Accounts Receivable 68,500.00 19-May Mechandise Inventory 18,700.00 Cash 18,700.00 19-May Accounts Payable 33,450.00 Cash 33,450.00 20-May Accounts Receivable 1,10,000.00 Sales 1,10,000.00 20-May Cost of Merchandise sold 70,000.00 Merchandise Inventory 70,000.00 20-May Sales returns 13,500.00 Cash 13,230.00 Cash discount 270.00 20-May Merchandise Inventory 8,000.00 Cost of Merchandise Sold 8,000.00 21-May Accounts Receivable 2,300.00 Cash 2,300.00 21-May Cash 42,900.00 Accounts Receivable 42,900.00 21-May Merchandise Inventory 88,000.00 Accounts Payable 88,000.00 24-May Accounts Payable 5,000.00 Merchandise Inventory 5,000.00 26-May Sales returns 7,500.00 Cash 7,500.00 26-May Merchandise Inventory 4,800.00 Cost of Merchandise sold 4,800.00 28-May Office Salaries Expense 29,000.00 Sales Salaries Expense 56,000.00 Cash 85,000.00 29-May Store Supplies 2,400.00 Cash 2,400.00 30-May Accounts Receivable 78,750.00 Sales 78,750.00 30-May Cost of Merchandise sold 47,000.00 Merchandise Inventory 47,000.00 30-May Cash 1,11,200.00 Cash discount 1,100.00 Accounts Receivable 1,12,300.00 31-May Accounts Payable 83,000.00 Cash 82,170.00 Cash discount Received 830.00 Closing Inventories 31-May Cost of Merchandise sold 15,500.00 Merchandise Inventory 15,500.00 31-May Insurance Expenses 12,000.00 Prepaid Insurance 12,000.00 31-May Store Supplies Expense 9,800.00 Store Supplies 9,800.00 11400+2400-4000 31-May Office Salaries Expense 6,600.00 Sales Salaries Expense 7,000.00 Salaries Payable 13,600.00 31-May Depreciation Expense 14,000.00 Accumulated Depreciation-Store Equipment 14,000.00Related Questions
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