PART 9 PARQADISE CREEK CO Post the closing entries. Indicate closed accounts by
ID: 2447341 • Letter: P
Question
PART 9 PARQADISE CREEK CO
Post the closing entries. Indicate closed accounts by inserting 0 (zero) in either of the Balance columns opposite the closing entry. Insert the new balance in the owner’s capital account.
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.
Post the closing entries. Indicate closed accounts by inserting 0 (zero) in either of the Balance columns opposite the closing entry. Insert the new balance in the owner’s capital account.
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
PART 9 PARQADISE CREEK CO Post the closing entries. Indicate closed accounts by inserting 0 (zero) in either of the Balance columns opposite the closing entry. Insert the new balance in the owner’s capital account. 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: Revised Account Balances A/c No and Code Balance 110 Cash $ 83,600 110 Cash 84500 112 Accounts Receivable 233,900 112 Accounts Receivable 255950 '115 Merchandise Inventory 624,400 115 Merchandise Inventory 581100 116 Estimated Returns Inventory 28,000 116 Estimated Returns Inventory 41300 117 Prepaid Insurance 16,800 117 Prepaid Insurance 4800 118 Store Supplies 11,400 118 Store Supplies 7400 123 Store Equipment 569,500 123 Store Equipment 569500 124 Accumulated Depreciation-Store Equipment 56,700 124 Accumulated Depreciation - Store Equipment 70700 210 Accounts Payable 96,600 210 Accounts Payable 98150 211 Salaries Payable — 211 Salaries Payable - 13600 212 Customers Refunds Payable 50,000 212 Customers Refunds Payable 25000 310 Lynn Tolley, Capital, June 1, 2015 685,300 310 Lynn Tolley Capital June 1 685300 311 Lynn Tolley, Drawing 135,000 311 Lynn Tolley Drawing 135000 312 Income Summary — 312 Income Summary = 410 Sales 5,069,000 410 Sales 5359250 510 Cost of Merchandise Sold 2,823,000 510 Cost of Merchandise Sold 2789000 520 Sales Salaries Expense 664,800 520 Sales Salaries Expense 63000 521 Advertising Expense 281,000 521 Advertising Expense 292000 522 Depreciation Expense — 522 Depreciation Expense - 14000 523 Store Supplies Expense — 523 Store Supplies Expense - 2400 529 Miscellaneous Selling Expense 12,600 529 Miscellaneous Selling Expense 15070 530 Office Salaries Expense 382,100 530 Office Salaries Expense 417700 531 Rent Expense 83,700 531 Rent Expense 88700 532 Insurance Expense — 532 Insurance Expense - 12000 539 Miscellaneous Administrative Expense 7,800 539 Miscellaneous Admin Exp 5980 $ $ May 1 Paid rent for May, $5,000. Rent A/c DR 5000 To Cash/Bank A/c 5000 3 Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000. Purchase A/c DR 36000 To Martin A/c 36000 Cost of Merchandise A/c DR 36000 To Purchase A/c 36000 4 Paid freight on purchase of May 3, $600. Freight A/c DR 600 To Cash/Bank A/c 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. Korman Co A/c DR 68500 To Sales A/c 68500 Sales A/c DR 41000 To Cost of Merchandise A/c 41000 7 Received $22,300 cash from Halstad Co. on account. Cash A/c DR 22300 To Halstad Co A/c 22300 10 Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000. Cash A/c DR 54000 To Sales A/c 54000 Sales A/c DR 32000 To Cost of Merchandise A/c 32000 13 Paid for merchandise purchased on May 3. Martin A/c DR 36000 To Cash/Bank A/c 35280 To Discount Received A/c 720 15 Paid advertising expense for last half of May, $11,000. Advertisement Expenses A/c DR 11000 To Cash/Bank A/c 11000 16 Received cash from sale of May 6. Cash A/c DR 67130 Discount Given A/c DR 1370 To Korman Co A/c 68500 19 Purchased merchandise for cash, $18,700. Purchase A/c DR 18700 To Cash/Bank A/c 18700 Cost of Merchandise A/c DR 18700 To Purchase A/c 18700 19 Paid $33,450 to Buttons Co. on account. Buttons Co A/c DR 33450 To Cash/Bank A/c 33450 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. Sales Returns A/c DR 13500 To Korman Co A/c 13500 Korman Co A/c DR 13500 To Cash/Bank A/c 13230 To Discount on Returns A/c 270 Cost of Merchandise A/c DR 13500 To Sales Returns A/c 13500 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. Crescent Co A/c DR 110000 To Sales A/c 110000 Sales A/c DR 70000 To Cost of Merchandise A/c 70000 21 For the convenience of Crescent Co., paid freight on sale of May 20, $2,300. Freight A/c DR 2300 To Cash/Bank A/c 2300 Crescent Co A/c DR 2300 To Freight A/c 2300 21 Received $42,900 cash from Gee Co. on account. Cash A/c DR 42900 To Gee Co A/c 42900 21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000. Purchase A/c DR 88000 To Osterman Co A/c 88000 Cost of Merchandise A/c DR 88000 To Purchase A/c 88000 24 Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. Osterman Co A/c DR 5000 To Purchase Returns A/c 5000 Purchase Returns A/c DR 5000 To Cost of Merchandise A/c 5000 26 Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800. Sales Returns A/c DR 7500 To Cash/Bank A/c 7500 Cost of Merchandise A/c DR 4800 To Sales Returns A/c 4800 28 Paid sales salaries of $56,000 and office salaries of $29,000. Sales Salaries A/c DR 56000 Office Salaries A/c DR 29000 To Cash/Bank A/c 85000 29 Purchased store supplies for cash, $2,400. Store Supplies A/c DR 2400 To Cash/Bank A/c 2400 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. Turner Co A/c DR 78750 To Sales A/c 78750 Sales A/c DR 47000 To Cost of Merchandise A/c 47000 30 Received cash from sale of May 20 plus freight paid on May 21. Cash A/c DR 111200 Discount Given A/c DR 1100 To Crescent Co A/c 112300 31 Paid for purchase of May 21, less return of May 24. Osterman Co A/c DR 83000 To Cash/Bank A/c 82170 To Discount Received A/c 830
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