Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 2018, are as follows. Assume all accounts have normal balances.
110 Cash $83,600 312 Dividends $135,000
112 Accounts Receivable 233,900 313 Income Summary —
115 Inventory 624,400 410 Sales 5,069,000
116 Estimated Returns Inventory 28,000 510 Cost of Goods Sold 2,823,000
117 Prepaid Insurance 16,800 520 Sales Salaries Expense 664,800
118 Store Supplies 11,400 521 Advertising Expense 281,000
123 Store Equipment 569,500 522 Depreciation Expense —
124 Accumulated Depreciation— Store Equipment 56,700 523 Store Supplies Expense —
210 Accounts Payable 96,600 529 Miscellaneous Selling Expense12,600
211 Salaries Payable — 530 Office Salaries Expense 382,100
212 Customers Refunds Payable 50,000 531 Rent Expense 83,700
310 Common Stock 100,000 532 Insurance Expense —
311 Retained Earnings 585,300 539 Miscellaneous Administrative Expense 7,800
Part 1: Journalize the transactions below for May, the last month of the fiscal year. For a compound transaction, if an amount box does not require an entry, leave it blank.
Part 2: Using the attached spreadsheet, post the journal entries from Part 1 to the general ledger. Extend the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
May 1: Paid rent for May, $5,000.
Comprehensive Problem 2
Part 3:
NOTE: You must complete parts 1 and 2 before completing part 3.
Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank.