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Palisade Creek Co. is a merchandising business that uses the perpetual inventory

ID: 2481620 • 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 Common Stock 100,000 311 Retained Earnings 585,300 312 Dividends 135,000 313 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

Explanation / Answer

1)

Date Particulars Debit Credit 1-May Cash 83600 Accounts Receivables 233900 Merchandise Inventory 624400 Estimated return Inventory 28000 Prepaid Insurance 16800 Store supplies 11400 Store equipment 569500 Dividends 135000 Cost of merchandise sold 2823000 Sales salaries expense 664800 Advertising expense 281000 Miscellaneous selling expense 12600 Office salaries expense 382100 Rent expense 83700 Miscellaneous administrative expense 7800          Acccumulated Depreciation 56700          Accounts Payable 96600          Customer Refunds Payable 50000          Common Stock 100000          Retained earnings 585300          Sales 5069000 1-May Rent expense 5000         Cash 5000 Rent expense paid for month of may 3-May Merchandise Inventory 36000          Accounts Payable 36000 Merchandise purchased on acccount 4-May Merchandise Inventory 600         Cash 600 Freight paid on merchandise purchases 6-May Accounts Receivables 68500          Sales 68500 Merchandise sold on account 6-May Cost of Merchandise sold 41000               merchandise Inventory 41000 Cost of merchandise transferred to cost of merchandise sold 7-May Cash 22300          Accounts Receivables 22300 Cash received on account 10-May Cash 54000          Sales 54000 Merchandise sold for cash Cost of Merchandise sold 32000               merchandise Inventory 32000 Cost of merchandise transferred to cost of merchandise sold 13-May Accounts Payable 36000          Merchandise Inventory 720          Cash 35280 Amount paid within discount period and availed 2 % discount 15-May Advertising expense 11000           Cash 11000 Paid merchandise expense 16-May Cash 67130 Discount on sale 1370           Accounts Receivables 68500 Received cash with in discount period and provided discount to customer 19-May Merchandise Inventory 18700          Cash 18700 Merchandise Inventory purchased 19-May Accounts Payable 33450         Cash 33450 Amount paid on account 20-May Merchandise Inventory 8000          Cost of merchandise Inventory 8000 Reversal of cost of inventory returned 20-May Estimated return Inventory 13500         discount on sale 270         Customer refund payable 13230 Entry for Goods returned 20-May Customer Refund Payable 13230          Cash 13230 Customer Refund Paid 20-May Accounts Receivable 110000        Sales 110000 Merchandise sold on account Cost of Merchandise sold 70000          Merchandise Inventory 70000 Cost of merchandise transferred to cost of merchandise sold 21-May Accounts Receivable 2300        Cash 2300 Freight paid on behalf of Crescent co. 21-May Cash 42900        Accounts Receivable 42900 Cash received on account 21-May Merchandise Purchase 88000       Accounts Payable 88000 Merchandise Purchase on account 24-May Accounts Payable 5000          Merchandise Purchase 5000 Goods returned to supplies 26-May Estimated return Inventory 7500           Cash 7500 Customer returned goods 26-May Merchandise inventory 4800          Cost of merchandise sold 4800 reversal of cost of merchandise sold 28-May Sales salaries expense 56000 Office salaries expense 29000         Cash 85000 Salary expense paid 29-May Store supplies 2400       Cash 2400 store supplies purchased 30-May Accounts Receivable 78750        Sales 78750 Merchandise sold on account Cost of Merchandise sold 47000          Merchandise Inventory 47000 Cost of merchandise transferred to cost of merchandise sold 30-May Cash 111200 Discount on sales 1100       Accounts Receivables 112300.00 Cash received on account , within time period and allowed dicount on sale value of 110000 at 1 % 31-May Cash 82170 Merchandise Inventory 830           Accounts Payable 83000 Amount received on account