urder per getlud aoss nalba Palisade Creek Co. is a merchandising business that
ID: 2474829 • Letter: U
Question
urder per getlud aoss nalba Palisade Creek Co. is a merchandising business that uses the perpenual inventory syste The account balances for Palisade Creek Co as of May 1, 2016 Cunless otherwise indicate are as follows: 110 Cash 5 836c0 112 Accounts Receivable 115 Menchandise Inventory 116 117 Prepaid insurance 118 Store Supplies 123 Store Equipment 124 Accumulated Deprecilation-Store Equipment 210 Accounts Payable 211 Salaries Payable 212 Customers Reflunds Payable 310 Lynn Tolley, Capital, June 1, 2015 311 Lynn Tolley, Drawing Estimated Returns Inventory 35,000 312 income Summary 410 Sales 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 522 523 Advertising Expense Depreciation Expense Store Supplies Expense 281,000 529 530 Miscellaneous Selling Expense 2100 Office Salaries Expense Rent Expense 531 During May, the last month of the fiscal year, the following transactions were completed 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 wwas $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 inwoice amount cost of the returned merchandise was $8,000. t of the returned merchandise was $13,500 and the Recond the following transactions on Page 21 of tbe journal 20. Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the mercflandise 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. (Continued) May 21Explanation / Answer
Date Accounts Title Ref No. Dr Cr May 1 Rent expense 531 $5,000 Cash 110 $5,000 (Paid rent) 3 Mercandise Inventory 115 36000 Accounts payable 210 36000 (being mercandise on account) 4 Freight in 600 Cash 110 600 (Being freight paid) 6 Accounts Receivable 112 $68,500 Sales 410 $68,500 Cost of Mercandise Sold 510 41000 Mercandise Inventory 115 41000 (being mercandise cost transferred to COGS) 7 Cash 110 22300 Accounts Receivable 112 22300 (cash received on account of Halstad co.) 10 Cash 110 54000 Sales 112 54000 (Being sales on account) Cost of Mercandise Sold 510 32000 Mercandise Inventory 115 32000 13 Accounts Payable 210 36000 Cash 112 35280 Purchase Discount (36000*2%) 720 (being amt paid within the credit term so discount received) 15 Advertising expenses 521 11000 cash 110 11000 16 Cash 110 $67,130.00 Sales Discount (68500*2%) 410 $1,370.00 Accounts Receivable 112 $68,500 (being cash received within the credit term period) 19 Mercandise Inventory 115 18700 cash 110 18700 20 Sales Return 410 13500 Cash 110 13230 Sales Discount (given earlier) 270 Mercandise Inventory 115 8000 Cost of Mercandise Sold 510 8000 (Being mercandise received) 20 Accounts Receivable 112 110000 Sales 410 110000 Cost of Mercandise Sold 510 70000 Mercandise Inventory 115 70000 21 Accounts Receivable 112 2300 Cash 110 2300 (Being freight charges paid on behalf of Cresent co.) 21 cash 110 42900 Accounts Receivable 112 42900 21 MercandiseInventory 115 88000 Accounts payable 210 88000 (being mercandise on account) 24 Accounts payable 210 5000 Estmated return Inventory 116 5000 (being goods returned) 26 Sales Return 7500 Cash 1110 7500 (Being sales return received) Cost of Mercandise Sold 510 4800 Mercandise Inventory 115 4800 28 Sales Salaries Expenses 520 56000 Office Salaries Expenses 530 29000 Cash 110 85000 (Being salaries paid for salesperson and ffice) 29 Store Supplies 118 2400 Cash 110 2400 30 Accounts Receivable 78750 Cash 110 78750 Cost of Mercandise Sold 510 47000 Mercandise Inventory 115 47000 30 Cash 110 110100 Sales Discount (110000*.02) 2200 Accounts Receivable 112 112300 (being cash recived in credit term period) 31 Accounts payable 210 83000 Cash 112 81340 Purchase discount (83000*.02) 1660
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